Thursday, March 12, 2009

FINANCIAL GOOD NEWS: Roche Buys Genentech For $46.8 Billion

With all the negative news lately, it's nice to see news like this that appears to be good news for both parties involved. From

Swiss drugmaker Roche Holding AG (ROG.VX) said Thursday it sealed a friendly deal with Genentech Inc. (DNA) to buy the 44% of the U.S. biotech company that it doesn't already own for around $46.8 billion, after raising the offer price to $95 a share.

Roche, based in Basel, said it expects the transaction to be accretive to earnings in the first year after closing. Roche already has the financing for the deal in place after it successfully placed a number of bond offerings in various currencies, raising nearly $40 billion in the process.

The agreement ends a nearly eight-month battle, in which Genentech repeatedly rejected Roche's offer.

Last Friday, Roche increased the offer price to $93 a share. The higher offer brought Genentech's independent board of directors to the table, with intense merger talks starting Saturday, Roche Chairman Franz Humer told reporters on a conference call Thursday.

The agreement finally reached is for a slightly higher price of $95 a share. Roche will amend its existing tender offer to reflect the increased price. The expiration date for the offer is March 25.

"We believe this is a fair offer for Genentech shareholders," said Charles Sanders, chairman of a special committee of independent Genentech board members in a statement. "We look forward to working with Roche to complete the transaction as expeditiously as possible."

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