Roche, based in Basel, plans to offer $89 per share for the 44% of Genentech that it doesn't already own -- or 8.8% more than the Friday closing price.
Roche said the buyout would generate synergies of $750 million to $850 million a year before tax -- and boost earnings per share in the first full year. Genentech's South San Francisco, Calif., base would become Roche's U.S. headquarters and together the groups would form the U.S.' seventh-largest drugmaker, with domestic sales of $15 billion, Roche said.
The Swiss group acquired a majority stake in Genentech, then a fledgling biotech, in 1990, and the U.S. group has provided Roche with some of its best-selling drugs including cancer treatments Avastin and Herceptin, which Roche markets outside North America. -
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Roche has to buy DNA now as it loses its exclusive marketing rights in 2015. According to BusinessWeek a full 30% of Roche's revenue comes from DNA products. As time goes on the acquisition price is likely to go up.
See: DNA - Genentech Inc: Roche Buyout Valued at $113 to $118
http://www.crossprofit.com/article.asp?id=171
by Steven Davidoff (New York Times) / CrossProfit