Roche to buy majority in Japan’s Chugai Pharma

Zurich, Dec 10: Swiss health care Group Roche Holding AG said on Monday, it will buy a majority stake in Japan’s Chugai Pharmaceutical, giving it a major foothold in the world’s second-largest drugs market.

Roche said the deal, worth up to Y198 billion would give it 50.1 per cent of Chugai after the Japanese company spins-off its Gen-Probe unit to shareholders, restoring Roche to the ranks of the world’s top 10 drug companies. Including cost synergies but excluding one-off effects, the acquisition should boost Roche’s earnings before interest, tax, depreciation and amortisation by 500 million to 600 million Swiss francs, it said.

The deal should start adding to earnings in the second full year and beyond, Roche added. “This unique transaction substantially strengthens our position, because it enables Roche to become one of the leading suppliers on the world’s second-largest pharmaceuticals market,” Roche chief executive Franz Humer said.

Roche said once Chugai had split off its Gen-Probe unit, it would make a tender offer for some 10 per cent of Chugai’s share capital at a price of Y2,136 per share.

That move would be followed by a merger of Chugai with Roche’s Japanese unit, Nippon Roche. After the planned aquisition of further Chugai shares at a price of 1,780 yen per share, Roche would finally end up holding 50.1 per cent of the new, combined company’s share capital. (Reuters)