Roche and Genentech have signed a merger agreement whereby Roche will acquire all outstanding publicly held shares in Genentech for $95 per share.
The special committee of Genentech's Board of Directors has approved the agreement and they recommend Genentech shareholders tender their shares. The deal sees Roche paying a total of around $46.8bn to equity holders, after increasing its offer price from the revised tender offer of $93 per share.
Dr Charles Sanders, chairman of the special committee of Genentech's Board of Directors, said: "We believe this is a fair offer for Genentech shareholders, and the committee is pleased to come to a successful conclusion of this process. We look forward to working with Roche to complete the transaction as expeditiously as possible".
The combined company will be the seventh largest US pharmaceuticals company in terms of market share and will generate around $17bn in revenue each year. Roche believes that combining the companies will reduce pre-tax costs by between $750 and $850m. Resulting savings will allow the company to increase its investment in innovation.
Roche plans to move its pharma commercial operations in the US from New Jersey to Genentech's site in San Francisco, which will become the headquarters of the new company's US commercial operations.
Severin Schwan, CEO of the Roche Group, said: "Roche and Genentech saw the potential of a pharma-biotechnology partnership early on and we are now in an enviable position to expand on the success of our longstanding relationship, which has been a source of immense value for patients, employees and shareholders of both companies."
The deal is subject to a majority tender from public shareholders. Should the tender be completed, Roche will complete a second merger seeing all remaining public shareholders receive $95 per share without any further action being required.
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