Roche and Genentech, a biotechnology company, have signed a merger agreement under which Roche will acquire the outstanding publicly held interest in Genentech for $95 per share in cash, or a total payment of approximately $46.8 billion to equity holders of Genentech other than Roche.
Research and early development will operate as an independent center within Roche from its existing campus in South San Francisco, retaining its talent and approach to discovering and progressing new molecules. Roche’s Pharma commercial operations in the US will be moved from Nutley, New Jersey to Genentech’s site in South San Francisco.
The combined company’s US commercial operations in pharmaceuticals will operate under the Genentech name, leveraging the strong brand value of Genentech in the US market. The existing US sales organizations of both companies will be maintained, resulting in a very strong presence in several specialty areas.
The transaction will provide the opportunity to simplify the structure of the combined organization and maximize the benefits of enhanced scale. Roche has already begun to wind down operations at its Palo Alto facility and will relocate the site’s Virology R&D activities to South San Francisco. Roche’s Palo Alto inflammation group is in the process of becoming part of Roche’s Nutley R&D organization.
Genentech’s late stage development and manufacturing operations will be combined with the global operations of Roche, achieving substantial scale benefits, operational synergies and cost avoidance. Roche’s manufacturing operations in Nutley will be closed and support functions, such as informatics and finance, will be consolidated with those of Genentech.
The combined company is expected to become the seventh largest US pharmaceuticals company in terms of market share. It will generate approximately $17 billion in annual revenues and will employ around 17,500 employees in the US pharmaceuticals business alone, including a combined sales force of approximately 3,000 people.