Chapter-1: Introduction

The term paper is about business expansion strategy of Roche, a Swiss multinational healthcare
company. Roche is the world’s largest biotech company, with truly differentiated medicines in oncology,
immunology, infectious diseases, ophthalmology and diseases of the central nervous system. Their
personalized healthcare strategy aims at providing medicines that enable tangible improvements in the
health, quality of life and survival of patients. 31 medicines developed by Roche are included in the
WHO Model Lists of Essential Medicines. They have been at the forefront of cancer research and
treatment for over 50 years, with medicines for breast, skin, colon, ovarian, lung and numerous other
cancers.

Roche Bangladesh Limited is an affiliate of Roche group which was founded in 1896 in Basel,
Switzerland. Since 1998, it is bringing latest treatment solutions for patients, suffering from cancer,
anaemia, and transplant, viral and immunological diseases in Bangladesh. They have extended their
cooperation with local business partner by Technology transfers, knowledge sharing and capability
development. Roche Bangladesh also supported local hospitals to build center of excellence for HER2, a
biomarker testing for breast cancer. Every year more than Ten thousand patients are being treated with
Roche innovative medicines in Bangladesh.

Roche can acquire a top pharmaceutical firm in Bangladesh to lead the pharmaceutical industry in the
country. This term paper will analyze the prospect of Roche to acquire or merge with top pharmaceutical
pharm to lead the market. Management objectives are analyzed that are set by the Roche’s Managerial
body. Market analysis will provide later to show the prospect of Roche in Bangladesh. Resources
availability and risk factors will analyze with the timetables. Management preferences can play a big role
here that are also discussed at the end of the term paper. It is really play a crucial role that how the
management act to acquire a leading pharmaceutical firm in Bangladesh. There are roles, responsibilities,
and financial capabilities to think about the business expansion process. The research team is trying to
find out every possible aspects to analyze the policy of Roche here. There are some limitations for the
research team to collect the updated information.
Chapter-2: Management Objectives

The acquisition plan’s stated objectives should be completely consistent with the firm’s strategic
objectives. Objectives include both financial and nonfinancial considerations.

Financial Objectives set by the Firm

Financial objectives in the acquisition plan could include a minimum rate of return or operating profit,
revenue, and cash-flow targets to be achieved within a specified time period. Minimum or required rates
of return targets may be substantially higher than those specified in the business plan, which relate to the
required return to shareholders or to total capital.

So, the major financial objectives is the firm will achieve rates of return that will equal or exceed its
cost of equity or capital by 20% in next two years. The minimum rate of return will be 5% that can
cause a slight increase in operating profit, revenue, and cash-flow. Group sales was increased by 9%
(CER) to CHF 61.5 billion in 2019. If the firm will acquire or merge with the top pharmaceuticals of
Bangladesh, it will definitely help to attain the financial objectives.
 Chapter-3: Market Analysis
In the following section, the external analysis of Bangladeshi pharmaceutical market is discussed in
detail.

External analysis:
External analysis starts with answering two basic questions, which involve determining where and how
the firm should compete. The primary output of the external analysis is the identification of important
growth opportunities and competitive threats. As Roche wants to operate its business in Bangladesh to
capture the market, it is planning to acquire one of the renowned pharmaceutical company.So it is
required to analyze the market of Bangladesh, for being well informed about the underlying opportunities
and threats related to the industry.

The driving forces that might be opportunity for Roche Pharmacy to operate business in
Bangladesh.

1. Economic Growth of the country: Bangladesh has entered the socio-economic classification of Lower Middle
Income Group. It is targeted that Bangladesh will become higher Middle Income Group and Higher Income Group
by 2021 and 2041 respectively. As GDP growth is higher than population growth, per capita income is likely to
rise. This will lead to higher health care expenditure by both individual and government.

2. Population Growth rate: Bangladesh is one of the densely populated countries (ranked 13 th in the world in
terms of population density6) in the world with 166 million people. According to World Bank and World Meter,
from 2008 to 2019 average population growth rate of Bangladesh is 1.1% annually. This drives the growth of
Pharmaceuticals sector of Bangladesh.

2. Growing Income level of people: Average income level of people of Bangladesh has increased. According to
BBS provisional estimation, the per capita Gross National Income (GNI) rose to $1,610 in the 2018-19 fiscal years
which was $1,465 in the 2017-18 financial years. Average income has grown by 9.4% from 2017-18 to 2018-19.
Thus, people have more money to allocate for medical expenditure.

3. Increase in modern healthcare facilities: Medical and Pharmaceutical facilities in Bangladesh are adopting
modern technology. This will largely contribute to the growth of Pharmaceuticals industry of Bangladesh.

4. Health awareness of mass people: People of Bangladesh is becoming aware of health day by day.
Increased awareness of health will lead to the growth of pharmaceutical sector of Bangladesh.

5. Changing Life Style: Life of city dwellers and urban people is changing rapidly. They lack proper
nutrition and rest. At the same time they take adulterate food and face different pollution. To keep
healthy, they have to rely on advice of physician and medicine heavily.

6. High Life Expectancy: Life expectancy among the people has significantly increased. In 2015, life expectancy
at birth is 72.2 years where it was only 66.4 years in 2002. To achieve a longer life, people use to consult with
physician regularly and take different medicine according to the prescription of doctors.
 Chapter-4: Resources availability and Risk
This section will describe the analysis of financial and non financial resources of Roche and different
types of risk that may face in the whole acquisition process.
Financial Resources
Roche make investments in life science companies aiming to create value by fostering innovation,
guiding successful businesses and generating financial return to Roche. Their commitment to
investments is not just about funding - They provide their team’s expertise and the promise of long term
vision to drive their shared success together. If Roche come to Bangladesh, they can invest such
companies in which they want to get merged or acquire.

Their teams working across business strategy and finance areas are responsible for driving strategic
initiatives. From supporting and driving business development across our company, to managing
procurement and financial direction and maintaining a high level of compliance and strong legal
guidance. Their business strategy and finance disciplines ensure that they are innovative and living their
purpose by doing now what patients need next.

Drives of investments
Roche’s dedicated team is self-contained with a mandate for independent decision making on new and
existing investments. They make investments in life science companies aiming to create value by
fostering innovation, guiding successful businesses and generating financial return to Roche. MedRx and
SGS are such life science organizations where Roche can invest in Bangladesh.

Companies that they invest in

Roche invest in private companies with innovative medicines, diagnostics and technologies all over the
world. In select cases, Roche will invest in companies alongside research and development
collaborations with Roche or Genentech. They share Roche's culture of innovation. They are global,
forward looking and willing to take risks on innovations with high potential reward.

R&D Expenses

Roche spent $12.3 billion in research & development (R&D) expenses in 2018. This figure is one of
the highest among pharmaceutical companies. As a percentage of revenue, R&D was 20% in 2018. R&D
is one of the key expense items for pharmaceutical companies, as their drugs have a limited exclusivity
period, post-which, generics and biosimilars enter the market. As such, there is more incentive for
Bangladeshi pharmaceutical companies to keep developing new compounds. Roche in particular has a
large cancer drugs portfolio and some of its key drugs have lost exclusivity in the recent past or are about
to lose it in the near term, and this could cost the company billions of dollars in sales. As such situation,
if the company come to Bangladesh, it might invest more in the development of new drugs. 
Managerial resources

Managerial resources refer to intangible assets in the form of managerial skills. Managerial resources
also knows how to use the human resource.  Management capabilities relevant to the seizing of
opportunities include tacit knowledge of employee skills, seeing the potential of R&D investments.

Human resource

At Roche, the employees are the most important foundation for company success. It is therefore their
duty to facilitate optimal working conditions for all employees. For this reason, their human resource
department is of central importance within the company and offers an exciting scope of opportunities. If
Roche started a journey in Bangladesh, they will have an excellent amount of human resource which
already exist in our country. At Roche, 98,000 people across 100 countries are pushing back the frontiers
of healthcare. Working together, they’ve become one of the world’s leading research-focused healthcare
groups. Their success is built on innovation, curiosity and diversity. Roche is an equal opportunity
employer and strictly prohibits unlawful discrimination based upon an individual’s race, color, religion,
gender, sexual orientation, gender identity/expression, national origin/ancestry, age, mental/physical
disability, medical condition, marital status, veteran status, or any other characteristic protected by law.

Innovation
To ensure that they can continue to provide innovative products and services for patients, they invest
about one-fifth of our sales in research and development (R&D) activities every year. Their focus on
science in areas of high need, and with our expertise in pharmaceuticals and diagnostics under one
roof, Roche has been successful in introducing six new medicines in different diseases and indications
and many new diagnostic tests, instruments and services since late 2015. Additionally, they have broad
and exciting pipelines in both their Pharmaceuticals and Diagnostics Divisions. Roche focus on
therapeutic areas where they can make significant contributions to society. This includes disorders of the
central nervous system such as Alzheimer’s disease and autism spectrum disorder, where they are
conducting studies that need a high level of investment. In Diagnostics, they are advancing their vision of
the Integrated Core Lab with a broad range of diagnostic tests and fully automated processes. Roche is
also innovating in areas of unmet need by developing new medicines for diseases in which there has been
no major progress for decades, including bladder cancer (Tecentriq), multiple sclerosis (Ocrevus) and
giant cell arteritis (Actemra/RoActemra). Approved by the FDA in November 2017, Hemlibra offers
immense possibilities for an improved quality of life for those with haemophilia A. Their point-of-care
cobas Liat system provides precise test results rapidly, when time is of the essence for a patient’s
survival.

Risk evaluation
 It is essential to identify risk in acquiring a company to make plan about how to use the available
resources for leveraging the risk. In business, different types of risk prevailed in micro and macro
environment. Today’s Merger & acquisition market is too competitive and expensive due to financial
arbitrage, inflated cross-selling model etc. To ensure the appropriate use of available resources in making
out an acquisition plan, acquiring firm must identify the risk factors related to acquiring the firm.

Roche, the world leading pharmaceuticals, is working with more than 150 partners around the world for
clinical development, manufacturing and commercial operation (Hayman and Roche, 1977). This biotech
company has developed a supreme research division, broad portfolio of investment in different private
companies to make differentiated medicines available for human. As Roche mainly focus on R&D to
advance the standard of care for diseases with significant unmet need for ensuring the development of
shareholders as well as society.

Roche has already affiliate programme in Bangladesh to deliver its differentiated medicine for human
suffering. They face difficulty in providing medicines to Bangladesh’s customers from different
geographic parts. To facilitate their operation in Bangladesh, they are considering to acquire a firm
within the pharmaceuticals industry. Previously we have identified the available resources that Roche
can invest in this merger and acquisition process. So it is necessary to identify the relevant risks for
proper implementation of this acquisition plan.

Operating Risk- The operating risk relates to the ability of acquirer company to manage the acquired or
merged company. This risk is higher when merger &acquisition is done between unrelated markets or
industries. Roche is facing lower risk as they are considering to acquire a firm from pharmaceuticals
industry. Roche has a vision to improve patient access to medical innovations by working with all
relevant stakeholders. Roche continues to search for better ways to prevent, diagnose and treat diseases
and make a sustainable contribution to society. They can use the extensive distribution network of
Bangladeshi Pharmaceuticals companies to deliver drugs at rural level. Bangladeshi pharmaceuticals
market is basically concentrated and top 10 companies hold 70% of the domestic market share. 80% of
the produced drugs by Bangladeshi companies are generic drugs. Manufacturing companies have the
ability to produce necessary drugs for meeting the 97% of local demand (Rahman, 2019). By acquisition
of an established company, Roche can reduce the difficulty of providing their medicine to all consumers
of Bangladesh. As innovation focused company, Roche will face difficulty to conduct the research based
activities in Bangladesh because major pharmaceuticals are developed to mass production.

Financial Risk- Buyer company needs to choose target firm with proper credit rating and favourable
financial ratios. Roche should choose a company with good financial condition and credit rating. Roche
maintains an institutional policies to manage financial risk in case of investment. In acquiring
Bangladeshi firm, the major risk for Roche is to find necessary investor from local market to expand the
business of acquired firm. The capital market and stock market of Bangladesh is not properly structured.
The bad credit rating of target firm or unstable economic condition could result fails for Roche to earn its
cost of capital. In this case Square Pharmaceuticals can be chosen as target firm that has been given AAA
rating for long term and ST-1 rating short term by the rating committee of Credit Rating Information and
Services. The increased spending for research activity by Roche in target firm creates a risk of earning
desired return from investment within specified time.

Overpayment Risk- This is a common problem for buyers in acquiring firm. When there is competitive
firm in target industry, buyer become optimistic to expand quickly business with the target firm (Ren and
Han, 2017). In pharmaceuticals industry of Bangladesh, top companies like Square, Beximco, Incepta
etc. can be the target for Roche. Roche should not evaluate high price for Target Company than the
actual economic value of the company. If Roche decides to issues new share to acquire the existing
shareholders of target firm, this may decrease the EPS of its existing shareholder.

Risk in Achieving Synergy- The success of acquisition largely depend on the operational efficiency of
integrated firm. To achieve the anticipate synergy, buyer must consider the risk related to
operating the acquiring firm. In acquiring Bangladeshi pharmaceuticals, Roche have to face difficulty in
developing a research driven organisation and workforce. This may create difficulty in achieving
financial objectives of Roche by acquiring the target firm.

Roche’s operational success and experience with available resources will be able to leverage these risks
for achieving the success of acquisition plan.

Chapter-5: Management Preferences

The purpose of this part is to provide guidance to those responsible for finding and valuing the target as
well as negotiating the transactions in the following areas:

1. Determining the criteria used to evaluate prospective candidates:

The Swiss Multi National Pharma Company Roche, which is the world's largest biotech company, has
expressed its eagerness to serve more cancer and rare disease patients in Bangladesh. Having been in the
country for more than three decades, the firm sees more prospects for the country's development of and
commitment to non-communicable disease care (Kolasani, 2016). Despite of these prospects, they face
some problems like high custom duties, regulations with some long processes, longer registration time
etc. To solve these problems they want to merge with most eminent and old Bangladeshi pharmaceuticals
company. For these reasons they need to set criteria to evaluate prospective companies of Bangladesh.

 Competitive price with one of the best quality product: Roche want to engage in ethical
business here in Bangladesh and ensuring innovative molecule availability in the country and see
possibilities of an expansion in terms of bringing in new and best quality products and serving
more patients. That’s why they want to merge with that company who supply best quality product
for competitive price.
 Efficient & wide distribution channels: The target pharmaceuticals must follow two types of
distribution channels for the two types of customers: (a) Distributor storage with carrier delivery
for the hospitals, clinics, and medical care centers, and (b) Retail storage from where customer
directly picks up the medicine.

Distributor Storage with Carrier Delivery: Target pharmaceuticals must provide direct shipping from
the central depot to the hospitals, clinics, and medical care centers. This network must provide the
following facilities:

(a) Faster response time,

(b) Lower transportation costs,
(c) Faster time to market,
d) Easier order visibility
(e) Easier return ability,
(f) Infrastructure information, and
(g) Better customer experience.

Retail Storage with Customer Pickup: In this networks system, customers walk into the retail store and
place an order by phone and pick the medicines at the retail store. The advantages of using the network
are:

(a) Lowest transportation costs,

(b) Fastest response time,
(c) Very good customer experience, and
(d) Easier return ability.
 Aggressive Diversification: Target must have keen to diversify its capacity of produce and
market. Strong export demand and international product registration must have led target to
embark on a massive capacity expansion as evident in expansion of plant and establishment of
new plant in compliance with FDA (Federal Drug Association) quality mark.
  Brand Leadership: Roche want to merge with high brand Image Company because positive
impression on its products which is already in the minds of the doctors & patients helps them to
get a very good response from the market for any product that they will introduce in the market.
 Basic Chemicals and Multipurpose manufacturing Infrastructure: Targets must have well
developed chemistry, R & D and manufacturing infrastructure with proven track record in
advanced chemistry capabilities, design of high tech manufacturing facilities and regulatory
compliance. Because Roche want to expand and to ensure access to new innovations on
oncology, immunology, infectious diseases, ophthalmology and diseases of the central nervous
system.as well as healthcare strategy aims at providing innovative medicines and diagnostic tools
that enable tangible improvements in the health, quality of life and survival of patients
(Ahmed,2009).
 Very skilled and efficient pharmacists: Target must have skilled scientists, technicians,
management personnel at affordable cost leading to low cost of innovation, manufacturing, apex
costs, and expenditure to run GMP (current Good Manufacturing Practice) compliance facilities
and high quality documentation and process understanding.

2. Specifying acceptable methods for finding candidates

Merger and acquisition allow businesses to increase their market share, expand their geographic reach
and become larger players in their industries. But selecting the right candidates for merger and
acquisition is not a facile task. It requires identifying or finding the suitable candidate lists to consider the
best one. Companies often use several ways to find candidate lists like soliciting board members,
analyzing competitors, contracting brokers, investment bankers, lenders, law firms, trade press etc.

Brokers

Roche is a Swiss Multinational Pharmaceuticals Company. Recently they decided to invest in

Bangladeshi Pharmaceuticals industry and tried to find out the potential candidate lists. For this, they
contacted the broker to gather the information of potential investment opportunities. They communicate
with several Bangladeshi brokerage firms like Reliance Brokerage Services Ltd., City Brokerage Ltd.,
Lonka Bangla securities Ltd.

Brokerage firms work as intermediaries between the firms and help the acquirer to find out the
information related to market share, capital compatibility, profitability, market segment, growth, product
line etc. Brokerage firms also help for valuation and negotiation with prospective sellers. Analyzing the
other methods, Roche decided to employ a contracted brokerage firm for finding potential candidates for
their investment.
Trade Press

Trade publication has a great impact on today’s business world. They offer online forums, resource
downloads, content libraries and virtual networking sessions. Also best industry publications are making
themselves more relevant and valuable to marketers. Roche also thinks to consider the trade press
information to validate and rationalize their candidate lists for investment opportunities in Bangladesh.

In this situation of foreign investment, analyzing the competitors of their (Roche) own country or
information from lenders or law firms seems unnecessary.

3. Role of the Acquisition Team

 Government members of the Team must be empowered to make acquisition decisions within their
areas of responsibility, including selection, negotiation, and administration of contracts consistent
with the Guiding Principles. In particular, the contracting officer must have the authority to the
maximum extent practicable and consistent with law, to determine the application of rules,
regulations, and policies, on a specific contract.

 The authority to make decisions and the accountability for the decisions made will be delegated
to the lowest level within the System, consistent with law.

 The Team must be prepared to perform the functions and duties assigned. The Government is
committed to provide training, professional development, and other resources necessary for
maintaining and improving the knowledge, skills, and abilities for all Government participants on
the Team, both with regard to their particular area of responsibility within the System, and their
respective role as a team member. The contractor community is encouraged to do likewise.

 The System will foster cooperative relationships between the Government and its contractors
consistent with its overriding responsibility to the taxpayers.

 The FAR outlines procurement policies and procedures that are used by members of the
Acquisition Team. If a policy or procedure, or a particular strategy or practice, is in the best
interest of the Government and is not specifically addressed in the FAR, nor prohibited by law
(statute or case law), Executive order or other regulation, Government members of the Team
should not assume it is prohibited. Rather, absence of direction should be interpreted as
permitting the Team to innovate and use sound business judgment that is otherwise consistent
 with law and within the limits of their authority. Contracting officers should take the lead in
encouraging business process innovations and ensuring that business decisions are sound.

Responsibilities may include but are not limited to:

 Serving as the final decision-maker for all contractual matters.

 Holding the final authority for all TTS contractual actions and only person to change the terms
and conditions of contract.

 Planning, developing, and establishing the acquisition strategy for a procurement in collaboration
with the team.

 Developing a pre-negotiation position, determining and justifying the types of contracts and
negotiation authority to be used, and leading contract negotiations.

 Coordinating the efforts of various subject-matter experts engaged in the procurement (program
managers, technical advisors, legal, financial managers, etc.).

 Leading a post-award kick-off meeting, to set the foundation for successful contract
administration through a common understanding of the contract/objectives, each team member’s
responsibilities, and how they will manage the contract together.

 Directing the full range of contract administration actions required for the procurement including
the issuance of contract modifications, negotiation of changes, exercise of options, contractor
performance appraisal, subcontractor surveillance, disposition of claims, contract close-out and
similar matters.

4. Identification of Acceptable sources of financing to acquire Square Pharmacy

Roche Bangladesh Limited is an affiliate of Roche group which was founded in 1896 in Basel,
Switzerland. Since 1998, they are bringing latest treatment solutions for patients, suffering from cancer,
anemia, and transplant, viral and immunological diseases in Bangladesh. In 2018 Roche invested 11.0
billion Swiss Francs3 in Research and Development. If they wanted to acquire Square Pharmaceuticals
they need to identify the sources of financing.
Types of Acquisition Finance
There are many popular form of acquisition financing sources that Roche has:
Cash Acquisition
In 25 February 2019, Roche announced that it acquired Spark Therapeutics for US$ 114.50 per share, all
in cash-transaction. Roche will promptly commence a tender offer to acquire all outstanding shares of
Spark Therapeutics common stock, and Spark Therapeutics will file a recommendation statement
containing the unanimous recommendation of the Spark Therapeutics board that Spark Therapeutics’
shareholders tender their shares to Roche. Moreover, in January 2016, the company announced it would
acquire Tensha Therapeutics for $115 million upfront, with $420 million in contingent payments, all in
cash. So they have huge cash funds to acquire square pharmaceuticals.
In an all-cash acquisition deal, shares are usually swapped for cash. The equity portion of the balance
sheet of the parent company remains the same. Cash transactions during an acquisition often happen in
situations where the company being acquired is smaller and with lower cash reserves than the acquirer.
Stock Swap Transaction
In May 2020, it has acquired Stratos Genomics, an early-stage sequencing technology company to
advance the development of Roche’s nanopore sequencer. The acquisition provides Roche access to
Stratos Genomics unique chemistry. The Roche nanopore sequencer, once developed, will utilize a novel
approach that combines electronic and biological components to sequence DNA for fast, flexible and
cost-effective clinical diagnostic testing.This acquisition was done by Stock Swap Transaction.
When Roche own stock that is traded publicly, the acquirer can exchange its stock with the target
company. Stock swaps are common for private companies, whereby the owner of the target company
wants to retain a portion of the stake in the combined company since they will likely remain actively
involved in the operation of the business. The acquiring company often relies on the proficiency of the
owner of the target firm to operate effectively.
Careful stock valuation is important when considering a stock swap for private companies. There are
various stock valuation methodologies used by proficient merchant bankers, such as Comparative
Company Analysis, DCF Valuation Analysis, and Comparative Transaction Valuation Analysis.
Acquisition through Equity
In its acquisition finance, equity is the most expensive form of capital. Equity financing is often desirable
by acquiring companies that target companies that operate in unstable industries and with unsteady free
cash flows. Acquisition financing is also more flexible, due to the absence of commitment for periodic
payments.
Acquisition through Debt
Roche had done acquisition through this sources a lot of times. Debt financing is one of the favorite ways
of financing acquisitions for Roche. Most companies either lack the capacity to pay out of cash or their
balance sheets won’t allow it. Debt is also considered the most inexpensive method of financing an
acquisition and comes in numerous forms. When providing funds for an acquisition, the bank usually
analyzes the target company’s projected cash flow, profit margins, and liabilities. Analysis of the
financial health of both the acquiring company and the target company is a prep course.
Asset-backed financing is a method of debt financing where banks can lend funds based on the collateral
offered by the target company. Collateral may include fixed assets, receivables, intellectual property, and
inventory. Debt financing also commonly offers tax advantages.
Leveraged Buyout
A leveraged buyout is a unique mix of both equity and debt that is used to finance an acquisition. It is
one of the most popular acquisition finance structures. In an LBO, the assets of both the acquiring
company and Target Company are considered as secured collateral.
Companies that involve themselves in LBO transactions are usually mature, possess a strong asset base,
generate consistent and strong operating cash flows, and have few capital requirements. The principal
idea behind a leveraged buyout is to compel companies to yield steady free cash flows capable of
financing the debt taken on to acquire them.

Seller’s Financing / Vendor Take-Back Loan (VTB)

Though they never did this kind of acquisition, but In January 2017, the company acquired ForSight
VISION4. In June, the company acquired the diabetes management platform, mySugr GmbH for an
undisclosed price. There are some rumor has that they acquired it through seller’s financing sources.
Seller’s financing is where the acquiring company’s source of acquisition financing is internal, within the
deal, coming from the target company. Buyers usually resort to the seller’s financing method when
obtaining capital from outside is difficult. The financing may be through delayed payments, seller note,
earn-outs, etc.

6. Openness to full or partial ownership

As Roche want to acquire or merge with renowned pharmaceuticals in Bangladesh, they need to plan for
its forms of ownership. Corporate ownership transparency helps tackle corruption, reduce investment
risk and improve global governance. Beneficial ownership data answers the fundamental question in any
anti-corruption investigation (NASDAQ: Halo). The following section describes the guidance of full or
partial ownership:

If Roche want to gain a controlling interest in the target firm it

may initiate a creeping takeover strategy in which it purchases target voting stock in relatively small
increments until it has gained effective control of the firm. This may occur at less than 50.1 percent if the
target firm’s ownership is widely dispersed. If about 60 percent of a firm’s eligible shareholders vote in
elections for directors, a minority owning as little as 35 percent can vote in its own slate of directors. The
company should pay more for the initial voting shares than for shares acquired at a later time. The
amount in excess of the target’s current share price paid to target shareholders tendering their shares first
often is referred to as a control premium.

The disadvantages to owning less than 100 percent of the target’s voting stock
include the potential for dissident minority shareholders to disrupt efforts to implement important
management decisions, the cost incurred in providing financial statements to both majority and minority
shareholders, and current accounting and tax rules (Kasonde et al., 2019). Owning
less than 50.1 percent means that the target cannot be consolidated for purposes of financial reporting but
rather must be accounted for using the equity method. After considering these issues, the firm should
focus on full ownership rather than partial ownership.

Conclusion

Roche’s dedicated team is self-contained with a mandate for independent decision making on new and
existing investments. But, they face some problems like high custom duties, regulations with some long
processes, longer registration time etc. To solve these problems they want to merge with most eminent
and old Bangladeshi pharmaceuticals company. Strong export demand and international product
registration must have led target to embark on a massive capacity expansion. Corporate ownership
transparency helps tackle corruption, reduce investment risk and improve global governance. The
authority to make decisions and the accountability for the decisions made will be delegated to the lowest
level within the System, consistent with law. In a competitive bidding situation, the bid of the buyer
willing to pay cash is more likely to be accepted by the seller. So, the payment Method will be in Cash.
They will pay taxes only on the difference between their cost basis in the stock of the acquiree and the
price at which they sell the stock of the acquirer.
To ensure that they can continue to provide innovative products and services for patients, they invest
about one-fifth of our sales in research and development (R&D) activities every year. Their focus on
science in areas of high need, and with their expertise in pharmaceuticals and diagnostics under one roof,
Roche has been successful in introducing six new medicines in different diseases and indications and
many new diagnostic tests, instruments and services since late 2015. Roche is facing lower operating risk
as they are considering to acquire a firm from pharmaceuticals industry. The increased spending for
research activity by Roche in target firm creates a risk of earning desired return from investment within
specified time. If Roche decides to issues new share to acquire the existing shareholders of target firm,
this may decrease the EPS of its existing shareholder. In acquiring Bangladeshi pharmaceuticals, Roche
have to face difficulty in developing a research driven organisation and workforce.

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