13 Mar 2009

Roche seals $US47 billion Genentech deal

10:32 am on 13 March 2009

Drugs company Roche is to merge with Genentech, and is to buy the remaining shares of the US company for $US46.8 billion.

Roche already owned 55% of Genentech. The BBC reports the deal is the latest merger in the pharmaceutical sector.

The combined group will generate about $US17 billion in annual revenues and will be the seventh-largest US drugs company.

Much of Genentech's revenue comes from cancer-related drugs.

Roche expects the merger to generate annual pre-tax cost savings of about $US750 - $US850 million.

Roche offered $US89 per share for the outstanding stock in July but Genentech shareholders rejected the offer as being too low. The new offer is for $US95 per share.

Roche deal

Earlier this week, Merck announced that it was to buy Schering-Plough in a $US41.1 billion deal, creating one of the world's biggest pharmaceutical companies.

Large drug companies have been trying to diversify, as prices fall and the patents on blockbuster drugs come close to expiring.