Roche becomes big in Japan

The Swiss pharmaceuticals giant Roche is set to become the fourth largest drugs company in the world's second largest pharmaceutical market, Japan.

The group's leap up the league table is expected after its bid for a 51% stake in Chugai Pharmaceutical was approved by shareholders.

The takeover, which would also hoist Roche back up among the world's ten leading drugs groups, could set off a wave of similar deals in the Japanese pharmaceutical sector, analysts predicted.

"This will prompt rivals to step up their partner-seeking," Morgan Stanley senior analyst Mayo Mita said.

Autonomy

Roche's Japanese operations are expected to be merged with Chugai.

But despite its controlling stake in the Japanese giant, the Swiss company was expected to offer it autonomy.

The new group would aim to achieve sales of 315bn yen in 2005/06 and clock up operating profits of 63bn yen.

The company would have a sales force of 1,400.

New markets

Analysts said Chugai could prove an enviable distribution channel for Roche's drugs in Japan.

In addition, the deal is set to give Chugai access to global markets.

Shares in Chugai closed near the bottom of its three-month trading range of 1,400-1,600 yen on Thursday.