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Genentech Accepts $47 Billion Roche Offer

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By DAMIAN J. TROISE

The Associated Press

Published: March 13, 2009

NEW YORK - Swiss pharmaceutical giant Roche agreed Thursday to pay $46.8 billion in cash to buy the 44 percent of California-based biotech pioneer Genentech that it doesn't already own, ending a long corporate struggle between the companies.

The deal, which values the whole of Genentech at more than $100 billion, underscores the lengths drugmakers are willing to go to shore up weak pipelines of new drugs.

The $95-per-share deal brings Roche, whose best-known products include Tamiflu and Valium, all of the sales of Genentech's highly profitable cancer drugs as well as its promising research pipeline and scientific corporate culture.

The deal, which is a tender offer approved by Genentech's board, offers $95 per share for the 44 percent of South San Francisco-Calif., based Genentech Inc. that Basel-based Roche Holding AG doesn't already own. A majority of shares besides Roche's still must be tendered for the deal to happen, with a deadline of March 25.

It is the latest megadeal among drugmakers, following Merck & Co.'s announcement Monday that it would acquire Schering-Plough Corp. and Pfizer's pending acquisition of Wyeth.

A dearth of new products and push for savings are driving the rush to combine. The deal values Genentech as a whole at $100.1 billion, including the portion of the company owned by Roche. That nearly matches the $109.1 billion combined total for Merck's and Pfizer's acquisitions.

Roche expects to save $750 million to $850 million per year by eliminating duplication.

The agreement ends Roche's hostile bid for Genentech.

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