Roche Makes Offer to Acquire All Outstanding Shares of Genentech for US$89.00 Per Share in Cash

Monday, July 21, 2008 General News
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BASEL, Switzerland, July 21 Roche(SWX: ROG.VX; RO.S; OTCQX; RHHBY), a world-leading healthcare company,announced today that it has proposed to acquire the outstanding publicly heldinterest in Genentech (NYSE: DNA), a leading biotechnology company, forUS$89.00 per share in cash, or a total payment of approximately US$43.7billion to equity holders of Genentech other than Roche. Roche acquired amajority in Genentech in 1990 and currently owns 55.9% of all outstandingshares.

Commenting on the proposal, Franz Humer, Chairman of the Board of Roche,said, "Our long and successful participation in Genentech has provided greatbenefits to both of our companies and shareholders. It has resulted in one ofthe biggest success stories in the healthcare industry. Roche's significantinvestment in Genentech over many years has helped it to focus on innovationand long-term projects, leading to some of the most important breakthroughs inthe treatment of cancer and other life-threatening diseases. The transactionwill create a unique opportunity to evolve Roche's hub-and-spoke model into astructure that allows us to strengthen the focus on innovation and acceleratethe search for new solutions for unmet medical needs. Combining the strengthsof Roche and Genentech will create significant value and result in benefitsfor patients, employees and shareholders."

Severin Schwan, CEO of Roche, said, "We are looking forward to workingmore closely with our colleagues from Genentech. We have great respect fortheir achievements and we will take the necessary steps to nurture Genentech'sinnovative and unique science-driven culture. The Genentech Founders ResearchCenter will operate as an independent unit within the Roche Group to safeguarda diversity of different approaches and to foster the long term flow of novelbreakthrough medicines. At the same time, we will be better able to sharetechnologies and expertise in pharmaceuticals and diagnostics across the Groupand broaden the mutual access to the external innovation networks of bothcompanies. As Genentech has grown from a research-focused biotech venture intoan integrated pharmaceutical organization, the transaction will also unlocksynergies by leveraging the scale of the combined operations in the U.S. andimproving operational efficiency."

Combined company structured to foster innovation

Genentech will operate as an independent research and early developmentcenter within Roche from its existing campus in South San Francisco, retainingits talent and approach to discovering and progressing new molecules. Roche'sPalo Alto Virology research and development activities will relocate to SouthSan Francisco, while its Palo Alto Inflammation group will become part ofRoche's Nutley, NJ research and development organization. Nutley will host twoglobal Disease Biology Areas (Oncology and Inflammation) as well as keyfunctions in Metabolism and will remain an important pillar for the U.S. andRoche's global organization. With Genentech's site in South San Francisco andRoche's New Jersey-based campus, the U.S. will be home to the biggest researchand development centers within the Roche Group.

The structure of the combined company will allow for a diversity ofapproaches in research and early development, while also strengthening crossfertilization between the companies, leading to enhanced overall innovationwithin the Group. Roche's recently adopted Disease Biology Area approach,which allows five diverse groups to manage their innovative portfolios, willbe maintained and strengthened. This, together with recent moves into RNAi(Ribonucleic Acid interference) and delivery technologies, as well aslicensing activities, continues to provide a stimulating environment for thecreation of medically differentiated medicines.

Roche's Pharma commercial operations in the U.S. will be moved from Nutleyto Genentech's site in South San

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