Roche Bids for Control of Chugai

Published Date : Aug 18, 2014

Japanese company Chugai Pharmaceuticals has been offered $10 billion by Roche, who is looking for full control of the company.

The first deal between a Japanese pharmaceutical company and its international rival was between the same Roche and Chugai. The deal was made 12 years ago when Roche acquired a majority stake in Chugai for $1.4 billion.

The new deal could be announced by next week at the earliest. The Tokyo-based Chugai, however, denies being a part of related discussions. The company made a statement to the Tokyo stock Exchange on Saturday, that they were in no such process of reviewing any sort of plan to be fully-owned by Roche, that they are not discussing any transaction with them.

The medical, biotechnological, and pharmaceutical sectors have seen a combined $260 billion in deals within the first half of 2014, the highest on record. Roche’s attempt in acquiring Chugai will be another in a strong spell of medical market deals that could create fresh growth and help make drugs cheaper.

Roche has already made large take-overs through the past three months, acquiring Seragon Pharmaceuticals for $1.7 billion, along with the Danish Santaris and the American Genia. Roche also made a $47 billion acquisition of Genetech in 2009. Their 50.1 percent stake in Chugai in 2002 marked a bold and voluntary move by a Japanese company with an international investor.

Roche generated almost $19 billion free cash flow in 2013, and analysts predict that they will be in a net cash position by 2015.