Roche has hiked its tender offer to buy a majority stake in Japan's Chugai Pharmaceutical Company.
The Basel-based company is offering close to double Chugai's current share price of 1,419 yen (SFr17.8), citing cost synergies and better than expected sales growth as reasons for the increase.
Back in December 2001, Roche offered 2,136 yen per share, but has upped its offer by 31 per cent, in a deal that would return Roche to the ranks of the world's top ten drugmakers.
Roche plans to purchase ten per cent of Chugai's outstanding shares - 30 million shares - for 2,800 yen per share, in a bid to improve its position in Japan, the world's second largest pharmaceutical market after the United States.
Under the agreement, Roche would take a 50.1 per cent stake in the company through the tender offer announced on Tuesday and a new share issue by Chugai, agreed in December, where Roche would purchase the new shares for 1,780 yen per share.
The deal would merge Nippon Roche and Chugai to create the fourth largest pharmaceutical company in Japan.
Based on 2000 figures, the combined businesses will have global pro forma sales of SFr20.5 billion for Roche's global pharmaceutical division and SFr30.4 billion for the Roche Group in total.
Besides the share price, all other terms of the parts of the deal remained unchanged, Roche has said. As announced in December, Roche will require Chugai to spin-off Gen-Probe, its California subsidiary that competes with Roche Diagnostics.
If approved, Chugai will be Roche's exclusive pharmaceutical representative in Japan and will have rights to develop and market all pharmaceutical products, which the Roche group decides to commercialise in Japan. Roche in return will have the right to license all Chugai products outside Japan and South Korea.
The company says big Chugai shareholders now approve the deal, which will be voted on at Chugai's annual general meeting scheduled for 27 June 2002.
The new company will keep the name Chugai, but will use the tag line "a member of the Roche Group".
Analysts say the move reflects the growing interest among Western drug firms in Japan, as companies there restructure and open up to foreign players.
swissinfo with agencies