Roche, Genentech Ink Merger

Roche and Genentech signed a merger agreement under which Roche will acquire outstanding Genentech shares for approximately $46.8 billion in cash. The special committee of Genentech’s board of directors has approved the agreement and recommends that shareholders tender their shares in Roche’s offer.

Research and early development will operate as an independent center and the Genentech’s South San Francisco site will serve as headquarters of combined U.S. commercial operations. The two companies will share research approaches, IP, technologies, partnerships and other key assets in an effort to enhance innovation. The transaction is expected to be EPS accretive in the first year after closing.

Arthur D. Levinson, Ph.D., chairman and chief executive of Genentech, said, “We have had a highly successful partnership with Roche for more than 18 years, and we intend to pursue our shared goal of discovering medications for serious and life-threatening conditions. We look forward to working with our partners at Roche to ensure a smooth transition once the transaction is complete and to continue our mission of serving patients.”

Severin Schwan, chief executive officer 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. We are excited about working with our colleagues at Genentech and look forward to partnering with them to develop a plan for the successful combination of the two companies.”

The tender offer remains subject to the condition that a majority of the public shareholders tender their shares. If the tender offer is completed, Roche will complete a second-step merger in which all remaining public shareholders will receive $95.00 per share.