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Biotechnology industries

Genentech and Roche Announce Merger Agreement Amendment

Strategic Insights

— 1 min read

Genentech, Inc., a leading biotechnology company, and Roche Holdings, Inc. have revised their merger agreement, announced in May 1995, to change the form of the transaction. The new agreement extends for four years Roche's option to purchase Genentech's outstanding common stock at escalating prices, up to $82 per share. If Roche does not exercise this option, Genentech stockholders will have the right to sell their shares back to Genentech at $60 per share. The amendment was made necessary due to the automatic conversion of Genentech's redeemable common stock into common stock after June 30, 1995, requiring a merger form of transaction to consummate the deal after that date.

Key Takeaways:

  • The revised merger agreement extends Roche's option to purchase Genentech's outstanding common stock at escalating prices, up to $82 per share, for four years.
  • If Roche does not exercise its option, Genentech stockholders will have the right to sell their shares back to Genentech at $60 per share within 30 days of July 1, 1999.
  • The amendment was necessary due to the conversion of Genentech's redeemable common stock into common stock on June 30, 1995.
  • The approval of the merger agreement requires a favorable vote from the majority of shares not held by Roche.
  • Each party has the right to terminate the agreement if it is not consummated by September 30, 1995.
  • Genentech stockholders will vote on the merger agreement shortly after receiving SEC clearance, but the vote will occur well in advance of September 30, 1995.
  • Genentech is a leading biotechnology company that discovers, develops, manufactures, and markets human pharmaceuticals for significant unmet medical needs.

Statistics:

  • Roche's option to purchase Genentech's outstanding common stock escalates quarterly up to $82 per share.
  • Genentech stockholders will have the right to sell their shares back to Genentech at $60 per share.
  • The automatic conversion of Genentech's redeemable common stock into common stock occurs on June 30, 1995.
  • September 30, 1995, is the deadline for the merger agreement to be consummated.
  • $82 is the maximum price at which Genentech's outstanding common stock can be purchased by Roche under the merger agreement.

Sources:

  • Business Wire, May 25, 1995
  • Genentech, Inc. - Form 8-K filed with the SEC
  • New York Stock Exchange (NYSE)
  • Pacific Stock Exchange

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