Using the Mid Text Function/Moving and Copying Spreadsheets /Flow Charts Using Text Boxes and Auto Shapes

Mergers and takeovers are forms of external growth within a business. External growth occurs when one firm decides to expand by joining together with another. A takeover specifically refers to the gaining control of a firm by acquiring a controlling interest in its shares (51%). Merger, on the other hand, means the joining with another firm to form a new combined enterprise, shares in each firm are exchanged for shares in the other.

The company is so large that no one drug can lift it from its current sales doldrums. In addition, the company was once highly attractive to investors, but its recent stock price fell to 1997 lows. This may put pressure on the company to attempt acquisitions at a time when the company is ill-equipped to integrate a new company into its organization, and it is engaged in a cost-cutting program at a time when it may need to invest even more in research and development (McTigue Pierce, 2005).

When combining the figures for ROE, ROA and the DuPont analysis it appears that the company is using leverage favourably. ROE is greater than ROA and assets are greater than equity. This is a positive sign for shareholders as it suggests a good investment return in a company that is managing its shareholder equity well (Evans & McDowell, 2009).

Our WACC is almost constantly these years – around 5.50% -- via from 5.04% to 5.82%. We also use the scenario analysis for how the WACC and growth rate affect enterprise value and equity value.

The price per share of the common stock as of the most recent fiscal year-end date, which is January 28, 2012, is $18.69. On the other hand, the price per share on November 3, 2012, which is the day we can see the close price before the report date, is $35.11.

Mergers and acquisitions occur because executives from both the acquirer and target companies see the large amount of value that will result with a conjugation of each company’s assets. The acquisition will allow for the emergence of new identities and properties. Mergers and related acquisitions have occurred in a series of outbreaks. Recently, the pharmaceutical industry is seeing a rush of new mergers and acquisitions because of a combination of investor pressure and a narrowing window of opportunity. The reason for this current pattern is due to the fact that pharmaceutical companies and their associated board of directors believe that acquisitions are the clear way to grow revenues. The Merck Company’s acquisition of Medco as a pharmacy benefit manager are pursuing to increase their customer size and negotiating power, while developing new ways to serve customers. This acquisition will insert Merck within the trending consolidation of pharmaceutical benefit managers and drug suppliers, as this industry is becoming more than just an administrator and negotiator.

The calculation mentioned above shows some assumptions of WPC when they valuate the stock range of Interco. However, some assumptions should be questioned:

|Why is Roche seeking to acquire the 44% of Genentech it does not own? From Roche’s point of view, what are the advantages of owning 100% of Genentech? What are the |Arthur Levinson- Gen’’s Chairman and CEO |

All of these calculated figures can then be used to calculate the WACC which is (17% x 3.47%) + (83% x 11.2%) = 9.87% WACC. This WACC percentage can then be used to value the investment and as a comparative in valuation methods. The full calculation and numerical values are shown in Appendix 1.

Internet Center for Management and Business Administration Inc, 2003, BCG Growth Share Matrix, Available [Online]:

Genentech had become an important part of Roche’s business representing 24% of Roche’s pharmaceutical product sales in 2008. In July 2008, Roche made public that they’d want to acquire the remaining 44% of Genentech. For Roche this acquisition beholds several benefits, but of

The burst in M&A tendency in pharmaceutical sector is an inception to make the industry look like a pyramid. The present study is based on recent merger of Sun Pharmaceutical Industries and Ranbaxy; Sun Pharmaceutical Industries is a multinational pharmaceutical company having strong presence in the generic drug market in India. The company has a tremendous track record of 20 successful acquisitions. Sun Pharma after acquisition of Ranbaxy became India’s 1st and world’s 5th largest generic drug making company. Our study deals with impact of acquisition on financial health and profitability of the company. To come to a conclusion pre-acquisition and post-acquisition financial data have been

Secondly, it is very hard to value the benefits to Roche in taking over Genentech. One of the causes of a misvaluation is that synergies tend to be mispriced. On top of that, Genentech was waiting on test results of their cancer drug Avastin, which were expected in April 2009. If the acquisition would take place before this date, Roche bears the risk that the drug is rejected. This would result in a drop in value of Genentech. The risk that Roche takes by waiting with the acquisition until after the test results will be published is that if the test results tend to be positive stock price of Genentech would increase. This increase would make a deal substantially more expensive and thus it would make it even harder to

a) As Basques & Steiner (“B&S”), we will begin by first commenting on the characteristics of the merger and then discuss the relevance of preferred stock to Pressler – Awari (PA) and their completion of the merger.

1.One being an IPO offering, requiring the sale of less than 9% of the company. This offering will be for 3.5 million shares, with an expected sale price at between $14 and $18 per share.