Roche Holdings AG will finally
acquire the remaining 44% of Genentech Inc.'s (NYSE:DNA) shares it doesn't own for $46.8 billion. The deal is about
22 times Genentech's forecast 2010 earnings.
The valuation of the deal is more expensive then both Pfizer Inc.'s
(NYSE:PFE) acquisition for Wyeth for $68 billion and Merck & Co.'s (NYSE:MRK) deal to
acquire Schering-Plough Corp. (NYSE:SPG) for $41.1 billion, illustrating the strength clinical trial cancer treatment Avastin played in the bargaining. Next month when the clinical trial for Avastin ends, investors will find out if Genentech was worth the cost and the wait.
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The advisers on the deal
spent eight long months grueling over the terms (
read about those in The Deal's Pipeline). According to the press release, Greenhill & Co. is acting as financial adviser to Roche, and
Davis Polk & Wardwell is acting as legal counsel. The special committee is represented by Goldman, Sachs & Co. (NYSE:GS) and Latham &
Watkins LLP. Genentech is represented by Wilson Sonsini Goodrich &
Rosati.
This is the third Big Pharma healthcare deal that Goldman has advised. Goldman also participated in the Pfizer-Wyeth and
Merck-Schering-Plough deals. Mergers in healthcare are hot and account
for a third of overall merger activity. Prior to Roche's deal for
Genentech, the overall volume of pharmaceutical deals topped
$115 billion this year,
according to data from Thomson Reuters.
- Maria Woehr
