roche-pharmaSwiss drug maker Roche has agreed to acquire the remaining outstanding shares of US entity Genentech for $46.8 billion, making it the third largest deal in the global pharma industry in less than two months. “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," the two firms said in a statement.

Once the deal is completed, the Swiss firm would be acquiring 44% in Genentech. Roche already holds about 55% stake in the company. The combined firm would be the seventh largest US pharmaceuticals company in terms of market share. The Roche-Genentech announcement is the third major deal to be announced in less than two months. Last week, Merck said it would buy Schering-Plough Corp for about $41 billion. In January, Pfizer had agreed to take over Wyeth, in a deal valued at around $68 billion.

According to the statement, the combined entity would 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". Roche would be buying Genentech shares at a price of $95 per piece.

“We believe this is a fair offer for Genentech shareholders, and the Committee is pleased to come to a successful conclusion of this process. We look forward to working with Roche to complete the transaction as expeditiously as possible," Charles Sanders, Chairman of the Special Committee of Genentechs Board of Directors, said.

Roche expects the combination to generate annual pre-tax cost synergies of approximately $750 to 850 million. “Synergies will be largely driven by reducing complexity and eliminating duplicative functions and processes in areas like late stage development, manufacturing, corporate administration and support functions,” the statement noted. The transaction is expected to be accretive to Roche's earnings per share in the first year after closing.

Commenting on the deal, Roche Group Chief Executive Officer Severin Schwan, said, “Roche and Genentech saw the potential of a pharma-biotechnology partnership early on and we are now in an enviable position to expand on the success of our longstanding relationship, which has been a source of immense value for patients, employees and shareholders of both companies.”