Roche makes $43.7 billion offer for Genentech

7/21/2008

BASEL, Switzerland Swiss drug maker Roche has offered to acquire Genentech for $43.7 billion, Roche announced Monday.

The company wants to buy the outstanding shares that remain of South San Francisco, Calif.-based Genentech at $89 per share in cash. Roche acquired a stake of about 56 percent of Genentech in 1990. Since then, Genentech has brought to the market a slew of cutting-edge medicines that have racked up sales of more than $1 billion per year, including Avastin, Rituxan and Herceptin for various forms of cancer. In fact, Avastin and Rituxan both topped $2 billion in sales worldwide last year. As part of the two companies' arrangement, Genentech sells the drugs inside the U.S. and Roche outside the U.S.

Roche has promised that Genentech’s South San Francisco research center will stay in operation, while its “unique research culture” will be maintained. 

While neither company will announce whether the deal is definite or not, it’s a surprising move for Roche, who usually owns buys shares in companies and never fully buys a company outright. But, new chief executive officer Severin Schwan has already shown that Roche is heading in a new direction under his leadership.

“We are looking forward to working more closely with our colleagues from Genentech,” Schwan said. “We have great respect for their achievements and we will take the necessary steps to nurture Genentech’s innovation and unique science-driven culture.”

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