Roche, Genentech reach agreement

Basel, Switzerland, and South San Francisco, CA

-Roche and Genentech announced that they have signed a merger agreement in which Roche will acquire the outstanding publicly held shares of Genentech for $95 per share, or $46.8 billion, according to statements issued by both companies.

Genentech said its special committee of the board of directors approved the agreement and recommended that the company’s shareholders tender their shares in Roche’s offer.

“We believe this is a fair offer for Genentech shareholders, and the committee is pleased to come to a successful conclusion of this process,” said Charles A. Sanders, MD, the committee chairman. “We look forward to working with Roche to complete the transaction as expeditiously as possible.”

Franz B. Humer, chairman of the Roche Group said: “We are very pleased that we have reached an agreement with Genentech and secured a positive recommendation from the special committee. As stated previously, an agreed transaction offers clear and important advantages for the shareholders of both companies. I am delighted that the intensive negotiations have led to a successful conclusion. Working together, we aim to close the transaction quickly, thus removing uncertainty for employees and allowing us to focus even more intently on innovation and long-term projects. We have tremendous respect for our colleagues at Genentech and look forward to working with them to further accelerate our search for solutions to unmet medical needs.”

Arthur D. Levinson, PhD, chairman and chief executive of Genentech, echoed Humer’s sentiment. He 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.”

Roche will amend its existing tender offer to reflect the increased price and eliminate the financing and certain other conditions to the offer, according to the statements. If the tender offer is completed, the companies said, Roche will consummate a second-step merger in which all remaining public shareholders will, without the need for further action by any public shareholder, receive $95 per share. Roche and Genentech also have amended their affiliation agreement to permit all shareholders to receive the same increased price in the tender offer and the merger. The expiration date for the offer is March 25.

The combined company will be the seventh-largest U.S. pharmaceuticals company in terms of market share. It will generate approximately $17 billion in annual revenues and will employ around 17,500 employees in the U.S. pharmaceuticals business alone, including a combined sales force of approximately 3,000 people, according to the statements.

Research and early development will operate as an independent center within Roche from its existing campus in South San Francisco, the companies said. Roche’s pharma commercial operations in the United States will be moved from Nutley, NJ, to Genentech’s site in South San Francisco. The combined company’s U.S. commercial operations in pharmaceuticals will operate under the Genentech name, leveraging the strong brand value of Genentech in the U.S. market, they said.

Additional information about the transaction, including the offering documents, is available at

www.transactioninfo.com/roche

.