After a lengthy cat and mouse chase, Roche has finally convinced Genentech to sign a merger agreement that will create the seventh largest US pharmaceuticals company. The bait used to lure Genentech was an offer of $95 (74 euro) per share, or a total payout of approximately $46.8 billion (36 billion euro) to equity holders of Genentech other than Roche. The agreement is subject to the condition that a majority of the public shareholders tender their shares.

"We believe this is a fair offer for Genentech shareholders and the Committee is pleased to come to a successful conclusion of this process," says Charles Sanders, Chairman of the Special Committee of Genentech's Board of Directors, which has recommended all Genentech shareholders to tender in their shares.

The companies will use the opportunity to "simplify" the structure of the combined organization; for example, Roche has already begun to wind down operations at its Palo Alto (CA, USA) facility and will relocate the site's Virology R&D activities to South San Francisco (CA, USA). Savings will principally be driven by reducing complexity and eliminating duplicative functions and processes in areas such as late stage development, manufacturing, corporate administration and support functions.

"I am delighted that the intensive negotiations have led to a successful conclusion," says Franz B. Humer, Chairman of the Roche Group. "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."

There is also further rejoicing for Roche, which has also acquired another addition to its empire in the form of innovatis AG based in Germany. innovatis will become a fully integrated part of Roche Applied Science, and will develop and market products for cell analysis through Roche Applied Science's extensive global network.

www.roche.com
www.gene.com
www.innovatis.com