Roche/Corange Deal Comfirms Global Strategy

Roche's proposed acquisition of the Bermuda-based holding companyCorange (Marketletter June 2), which has a 100% stake in Boehringer Mannheim of Germany, and an 84.2% share in the US firm DePuy, is confirmation of its global leadership strategy, according to Goldman Sachs analysts Mark Tracey and John Murphy, who are firmly reiterating their rating of the company on their global priority list.

The deal will firmly strengthen Roche's position in the global diagnostics market, boosting it to the number one position ahead of US competitor Abbott Laboratories. It also drives Roche higher in the global pharmaceutical ranking from eighth position to sixth, they said. Genghis Lloyd-Harris and Vikram Sahu of Credit Suisse First Boston also applaud the deal and say that it positions Roche well to take advantage of the convergence of diagnostics and therapeutics.

Roche has aimed to become a leader in all its core businesses since it started to reorganize the group in the mid-1980s. The firm holds the number one position in vitamins with a 50% market share, in fragances and flavors it moved into the number one slot after buying USA-based Tastemaker, it is first in ranking in clinical laboratories following the creation of LabCorp, and is now number one in diagnostics.