Roche to lift stake in Chugai to 59.9%

Chugai Pharmaceutical says that it has decided to accept Switzerland-based Roche's offer to raise its stake in the Japanese drugmaker to 59.9%, from its current holding of 50.1%, saying this would allow it to raise profitability and corporate value by pursuing synergies with the drug major more aggressively. The news not only boosted Chugai's share price, which moved up 2.9% to reach 1,640 yen on May 23, but also livened up the pharmaceutical sector in Tokyo.

Roche has invited Chugai shareholders to tender their shares at a price of 1,730 yen each, an 11.7% premium over the firm's close on May 21. The transaction is based on Roche's right to increase its stake to 59.9% at any time after the fifth anniversary of the alliance.

Franz Humer, chairman of Roche, commenting on the move, said: "we intend to increase our stake because we believe in both the long-term potential of the Japanese market and in the strategic importance of this successful partnership. Since our partnership started more than five years ago, our relationship has intensified in all areas to the benefit of both companies."