Roche acquired a majority in Genentech in 1990 and currently owns 55.9% of all outstanding shares. The transaction will over time significantly enhance cooperation and cross fertilization among all research hubs inside and outside of the combined company. The separate research and early development unit in South San Francisco led by Genentech will be given the operational freedom to maintain a high level of creativity and independent decision making.
Genentech will also have access to the full strength of Roche’s worldwide development organization, thus significantly enhancing its ability to leverage international clinical trials and expertise. Roche’s Pharma commercial operations in the US will be moved from Nutley to Genentech’s site in South San Francisco.
The combined company’s US commercial operations in pharmaceuticals will reflect 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.
Roche expects the combination to generate annual pre-tax cost synergies of approximately $750 to $850 million. Savings resulting from this combination is expected to enable the new company to increase and better focus its investment in innovation.