Roche has closed a deal with Genentech, ending their protracted takeover battle, with a friendly accord, under which the Swiss healthcare giant will pay $95 a share to acquire the remaining stake in the biotechnology major.

Under the merger agreement signed between the two companies, Roche will acquire the outstanding publicly held interest in Genentech for $95.00 per share in cash, or a total payment of approximately $46.8 billion to equity holders of Genentech other than Roche. 

The special committee of Genentech's board of directors has approved the agreement and recommended that Genentech shareholders tender their shares in Roche's tender offer. 

The combination of Roche and Genentech will create the seventh largest US pharmaceuticals company in terms of market share, with combined annual revenues of $17 billion.

Roche plans to operate the research and early development centre in South San Francisco as an independent unit and combine its US commercial operations there.

Genentech will be maintain its present character, which will be enhanced through a diversity of research approaches and sharing of IP, technologies, partnerships and other key assets, the company said in a release.

The transaction, expected to be accretive in the first year results, was announced after market closed today.

 ''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,'' said Charles Sanders, chairman of the special committee of Genentech's board of directors.

''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,'' hea added

 ''We are very pleased that we have reached an agreement with Genentech and secured a positive recommendation from the special committee. As stated previously, an agreed transaction offers clear and important advantages for the shareholders of both companies.  I am delighted that the intensive negotiations have led to a successful conclusion. Working together, we aim to close the transaction quickly, thus removing uncertainty for employees and allowing us to focus even more intently on innovation and long-term projects. We have tremendous respect for our colleagues at Genentech and look forward to working with them to further accelerate our search for solutions to unmet medical needs,'' Dr Franz B Humer, chairman of the Roche Group, said.

''Working together, we aim to close the transaction quickly, thus removing uncertainty for employees and allowing us to focus even more intently on innovation and long-term projects. We have tremendous respect for our colleagues at Genentech and look forward to working with them to further accelerate our search for solutions to unmet medical needs,'' he added.

Roche will amend its existing tender offer to reflect the increased price and eliminate the financing and certain other conditions to the offer. The tender offer remains subject to the condition that a majority of the public shareholders tender their shares. If the tender offer is completed, Roche will promptly consummate a second-step merger in which all remaining public shareholders will, without the need for further action by any public shareholder, receive $95.00 per share for their shares, the company said in its release.

Roche and Genentech have also amended their affiliation agreement to permit all shareholders to receive the same increased price in the tender offer and the merger. The expiration date for the offer is 25 March 2009. As of the close of business on 11 March 2009, approximately 2.9 million shares have been tendered pursuant to the offer.

The combined company will be the seventh largest US pharmaceuticals company in terms of market share. It will 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.