Friday, Jun 8, 1990
Millbrae, Calif. -- June 8, 1990 --Stockholders of Genentech, Inc. today approved the $2.1 billion agreement with Roche Holding Ltd, in which Roche will acquire 60 percent of Genentech's stock. Of the votes cast on the transaction, 97 percent were in favor as tabulated at Genentech's annual meeting held here today. Before the transaction can become effective, requested information must be supplied to the Federal Trade Commission (FTC) and a subsequent 20 day waiting period must elapse.
"I am delighted that a vast majority of our stockholders have agreed that the Roche investment offers us an unmatched opportunity to continue to build Genentech, and to deliver the dream of biotechnology," said Robert A. Swanson, chairman. "With these added resources, we can focus even more intently on bringing the potential of our many products under development to those patients and their physicians who need them."
Under the agreement, Roche will invest approximately $492 million in capital in Genentech. For each 2 shares of existing stock, Genentech stockholders will receive $36 and one share of a new redeemable common stock which will be traded on the New York Stock Exchange. During the next five years, Roche has the option to purchase the remaining shares at escalating prices ranging from $38 per share to $60 per share.
Under the terms of the agreement, which was announced on February 2, Roche will be entitled to two members on Genentech's board of directors, which will be increased from 11 to 13 members. Roche will have some additional rights to protect its interest as majority stockholder, as outlined in the governance agreement that defines the relationship between the companies.
With the favorable stockholder vote, the only remaining regulatory concurrence required before the transaction becomes effective involves the FTC. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the FTC on March 23 requested more information on the proposed merger. Both companies are currently working to satisfy the FTC's request.
In the stockholder vote on the merger agreement, 52,856,929 shares voted in favor and 1,199,287 shares voted against, with 225,948 shares abstaining. A majority of the 84,959,698 outstanding shares were required to approve the transaction. The stockholders also approved the 1990 stock option/stock incentive plan, ratified the selection of the company's independent auditor, and reelected four members of the board of directors.
Genentech, Inc. is a leading biotechnology company with 1,800 employees and headquarters in South San Francisco, California. Genentech has one of the five largest hospital-based sales forces in the U.S. pharmaceutical industry and also directly markets its products in Canada. Its two marketed products are Activase, t-PA, for heart attack patients and Protropin, human growth hormone, a treatment for growth hormone deficient children. Sales of those products last year were $196 million and $123 million, respectively.
Genentech offers a rare blend of academic and entrepreneurial creativity which puts it at the leading edge of scientific research. Genentech research produced four of the first six biotechnology drugs approved in the United States. Genentech has recorded a number of firsts in the biotechnology industry including producing the first human protein in a microorganism (somatostatin in 1977); the pioneering work on the first recombinant DNA technology product to reach the marketplace (human insulin in 1982); and Genentech was the first biotechnology company to manufacture and market a pharmaceutical product (human growth hormone in 1985).
Roche is a leading research-based health care company which operates on a worldwide basis with sales of $6.5 billion and facilities in more than 50 countries. The company has research centers in Switzerland, the United States, the United Kingdom and Japan. It finances two independent basic research institutes located in Basel, Switzerland and Nutley, New Jersey. Roche and scientists associated with its basic research institutes have received worldwide recognition, including Nobel Prizes, for important contributions in basic and applied scientific research.
Roche's activities in the health care field have focused on innovative prescription medicines with particular emphasis on anti-infectives, cardiovasculars, CNS drugs, dermatologicals and anti-inflammatory drugs. It also is a pioneer in the field of biotechnology. Roche is a major researcher and developer of diagnostic products and a leading provider of clinical laboratory services in the United States. It is a world leader in the production and supply of bulk vitamins and fine chemicals used in the pharmaceutical, food and animal feed industries. Through its subholdings, Givaudan and Roure, the company also is a well-known producer of fragrances and flavors.
Roche employs more than 50,000 people worldwide with businesses in more than 100 countries. In 1989, more than 40 percent of its sales were generated in Europe, more than 36 percent in North America and nearly 20 percent in Asia and Latin America. Roche currently has in excess of 15,000 employees in the United States where it also has substantial research and manufacturing facilities. Group sales in the United States last year were more than $2 billion.
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