Commercial Finance 06/06/2011-26/8/2011

F. Hoffmann-La Roche, Ltd and Genentech, Inc.Basel and South San Francisco

Mathieu StiehlBachelor en Marketing et en Affaires InternationalesEcole de Management de Strasbourg - Ple Formation CCI

Time transitionshttp://www.gene.com/gene/news/press-releases/display.do?method=detail&id=119671ContentsSend Email on the organizational changes2ContentsSend Email on the organizational changes3

Silicon Valley versus Switzerland[Roche is] Swiss and Genentech is a bunch of entrepreneurial California cowboys.

Laurence Lasky, Silicon Valley venture capitalistStrongest nuancesCollectivismThere are a lot of people who come to work in the morning believing that they work for Silicon Valley.

Uncertainty avoidance Communication is often very informal and entrepreneurs often move from big companies to start-up companies which could be viewed as risky

Power distanceindividuals move from firm to firm and their paths overlap repeatedly

CHPeople are discrete, reserved and private, they value time away from the office and ponctuality. This might make them appear unfriendly for an American.

4Roche GroupConsensus decision making: Swiss democracy, everybody votes5GenentechPeople dress casual, atmosphere of a University campusSingle decision making: person best qualified6ContentsSend Email on the organizational changes7Up to 2009Relatively close relationshipOwnership: 56% of Genentech shares18 Years of partnership and financial help of today key products of Genentechs portfolio such as Herceptin and AvastinShared information in the pipelineOur long and successful participation in Genentech has provided great benefits to both of our companies and shareholders Franz Humer, Chairman, RocheVentanaThe deal, approved and recommended by Genentech's board, offers $95 a share for the 44% of Genentechthat Roche Holding doesn't already own8

Value propositionOn July 21st, 2008 Roche makes an offer to acquire all outstanding shares of Genentech for US$89.00 per share in cash with the following advantages:

Genentechs culture to be maintained; South San Francisco site to operate as an independent research and early development center and become headquarters of combined U.S. commercial operations

Improved operational efficiency to result from reduced complexity, elimination of duplications and increased scale in the U.S.

Transaction to deliver annual pre-tax synergies of US$750 -$850 millionThese are the reasons why Roche wants to take over Genentech, This offer is supposed to be attractive to the shareholders of Roche and Genentech, as well as the financial markets.Synergies (=savings)9

AgreementRoche purchases all Genentech shares and gains complete access to pipeline information, research and early trials remain independentDeal was reached on March 13th 2009 $95.00 per share, a total of $46.8 billion, March 26th Genentech no longer appeared in the NYSELogo replaced slogan with the mention: Member of Roche Group

Search business case (Harvard)10ContentsSend Email on the organizational changes11Changes in management

The Genentech Founders Research Center will operate as an independent unit within the Roche Group to safeguard a diversity of different approaches and to foster the long term flow of novel breakthrough medicines. Severin Schwan, CEO RocheCFO GNE from RocheHead of manu Roche from GNE

12Key success factorsBring together both communities, respect and understand differences between culturesStay focused on the business and committed to scienceRemain optimistic about the futureI hope employees () will seize the opportunity to think and act openly and creatively about the future of Roche and Genentech together.

Arthur Levinson, former Chairman, GenentechKeep the fun while working hard (HO-HOs)13In conclusionTwo years after the merger there are still some difficulties

Implementations of ITMerger or acquisition questionThink Global14Thank you for your attention

Q&A

AppendixDefinitions Merger: The combination of one or more companies, or other business entities into a single business entity the joining of two or more companies to achieve greater efficiencies of scale and productivity.Acquisition: The purchase of one corporation by another, through either the purchase of its shares, or the purchase of its assets.

Source: www.entrepreuneur.comMerger: A + B = C or ABAcquisition: A+ B = A or A+18