Roche makes offer to acquire outstanding Genentech shares
Roche has launched a bid to acquire the outstanding publicly held shares in US biotech company Genentech.
Roche has launched a bid to acquire the outstanding publicly held shares in US biotech company Genentech.
It is offering US$89 (Euro 56) per share in cash, representing a total payment of approximately $43.7bn ( €27.54bn) to equity holders of Genentech other than Roche. Roche acquired a majority in Genentech in 1990 and currently owns 55.9% of all outstanding shares.
The combined entity will be the seventh largest US pharmaceuticals company in terms of market share. It will generate more than $15bn ( €9.44bn) in annual revenues and will employ around 17,500 pharma employees in the US alone.
Roche intends that Genentech will operate as an independent research and early development centre within Roche from its existing campus in South San Francisco and will be given the operational freedom to maintain a high level of creativity and independent decision making.
Roche's Palo Alto virology r&d activities will relocate to South San Francisco, while its Palo Alto Inflammation group will become part of Roche's r&d organisation in Nutley, NJ. Nutley will host two global disease biology areas (oncology and Inflammation) as well as key functions in metabolism.
Roche's pharma commercial operations in the US will be moved from Nutley to Genentech's site in South San Francisco.
Genentech's late stage development and manufacturing operations will be combined with the global operations of Roche, achieving substantial scale benefits, operational synergies and cost avoidance. Roche's manufacturing in Nutley will be closed and support functions, such as informatics and finance, will be consolidated.
Roche expects the combination to generate annual pre-tax cost synergies of approximately $750-850m ( €472-535m).
"Our long and successful participation in Genentech has resulted in one of the biggest success stories in the healthcare industry," said Franz Humer, chairman of the board of Roche. "The transaction will create a unique opportunity to evolve Roche's hub-and-spoke model into a structure that allows us to strengthen the focus on innovation and accelerate the search for new solutions for unmet medical needs."