Roche Makes Offer to Acquire All Outstanding Shares of Genentech for US$89.00 Per Sha...(its ability to successfully commercializ...)

Strong financial benefits for both Genentech and Roche shareholders

The transaction will create significant value for shareholders of both Genentech and Roche. The offer represents a one day premium of 8.8% to Genentech's closing price of US$81.82 on July 18, 2008 and a one month premium of 19.0% to Genentech's closing price of US$74.76 on June 20, 2008.

Roche expects the combination to generate annual pre-tax cost synergies of approximately US$750 to $850 million. Savings resulting from this combination will enable the new company to increase and better focus its investment in innovation.

The transaction is expected to be accretive to Roche's earnings per share in the first year after closing. The combined company will generate substantial free cash flow that will enable it to reduce acquisition-related debt rapidly, invest in further product launches and retain strategic flexibility.

No impact on guidance for 2008 and dividend policy

The transaction will have no impact on Roche's sales and Core EPS targets for 2008, as communicated earlier in the year. Roche also remains committed to increasing its dividend pay-out ratio for the next three years as previously announced.

Next steps

Roche expects that the Genentech Board of Directors will establish a committee consisting solely of independent directors to evaluate Roche's proposal with the assistance of independent outside financial and legal advisors. Genentech Board members who are employees of Roche will not participate in the evaluation of the proposal. Roche currently contemplates that the transaction would be implemented through a cash merger between Genentech and a Roche subsidiary, pursuant to which all currently outstanding shares and options of Genentech other than shares owned by Roche would be converted int
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