Roche has proposed to acquire the outstanding interest in Genentech for a total of approximately $43.7 billion. Roche acquired a majority in Genentech in 1990 and currently owns 55.9% of the company.
   
Under the plan, Genentech will operate as an independent research and early development center within Roche from its existing campus in South San Francisco, retaining its employees and approach to discovering and progressing new molecules. Roche’s Palo Alto Virology R&D activities will relocate to South San Francisco, while its Palo Alto Inflammation group will become part of Roche’s Nutley, NJ R&D organization. Nutley will host two global Disease Biology Areas (Oncology and Inflammation) as well as key functions in Metabolism. Genentech’s site in South San Francisco and Roche’s NJ campus will represent the biggest R&D centers in the U.S. within the Roche Group.
   
Roche’s Pharma commercial operations in Nutley will be moved to Genentech’s site in South San Francisco. The combined company’s U.S. commercial operations in pharmaceuticals will use the Genentech name. The existing U.S. sales organizations of both companies will be maintained. Genentech’s late stage development and manufacturing operations will be combined with the global operations of Roche. Roche’s manufacturing in Nutley will be closed and support functions, such as informatics and finance, will be consolidated.
   
Severin Schwan, chief executive officer of Roche, said, “We are looking forward to working more closely with our colleagues from Genentech. We have great respect for their achievements and we will take the necessary steps to nurture Genentech’s innovative and unique science-driven culture. The Genentech Founders Research Center will operate as an independent unit within the Roche Group to safeguard a diversity of different approaches and to foster the long term flow of novel breakthrough medicines. At the same time, we will be better able to share technologies and expertise in pharmaceuticals and diagnostics across the Group and broaden the mutual access to the external innovation networks of both companies. As Genentech has grown from a research-focused biotech venture into an integrated pharmaceutical organization, the transaction will also unlock synergies by leveraging the scale of the combined operations in the U.S. and improving operational efficiency.”
   
The terms and conditions of the transaction will be determined through negotiations with the independent directors. Roche expects to complete the transaction as soon as possible following negotiation of a definitive merger agreement.