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Roche in $11B takeover
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May 26, 1997: 10:14 a.m. ET
Swiss drug giant adds Boehringer Mannheim, DePuy to its holdings
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NEW YORK (CNNfn) - Swiss pharmaceuticals firm Roche Holding Ltd. announced Monday it had reached an agreement to buy diagnostics and pharmaceuticals company Boehringer Mannheim Group for approximately $11 billion.
Under terms of the agreement, Roche will acquire all the shares of Corange Ltd., which is the sole owner of Boehringer Mannheim's diagnostics and pharmaceuticals business.
The Bermuda-based Corange also holds 84.2 percent of DePuy, Inc., a strong presence in the world of artificial joints and orthopedic products.
Fritz Gerber, chairman of Roche, said that the deal will strengthen his company's diagnostics position.
"We see long-term potential in the areas of disease management and patient care, both of which are gaining importance in the context of continuing efforts to reduce healthcare costs," Gerber said.
"Roche also gains market share in the pharmaceuticals sector as a result of the takeover. DePuy will complement our own activities in another segment of the healthcare market with growth potential."
The new venture, to be known as Roche Boehringer Mannheim Diagnostics, will have sales potential of about $2.4 billion and will employ about 13,500.
Pharmaceuticals companies have recently been merging at a torrid pace in a belief that they must be able to offer a wide spectrum of products and services in order to compete globally.
Roche has about 2.7 percent of the global market, with leaders Glaxo Wellcome and Novartis hovering at just under 5 percent.
Boehringer Mannheim's lab diagnostics, patient care, biochemicals and therapeutics divisions employ about 18,000 and had sales of about $3 billion last year, not including DePuy.
For its part, DePuy had sales of about $612 million in products such as artificial joints and implants and orthopedic and arthroscopic instruments. With Roche as its new majority shareholder, DePuy will operate as an independent organization.
--Randy Schultz
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Roche
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