Pharmaceutical Giant Plans a Restructuring : Hoffmann-La Roche Maps Several Changes

Swiss drug manufacturing giant F. Hoffmann-La Roche & Co. said Monday that it will modernize its share structure and reorganize its corporate framework.

The changes would make it easier to invest in the company and conform to pending changes in Swiss corporate law.

Hoffmann-La Roche failed in a takeover bid for Sterling Drug Inc. last year, and the streamlining could help the company in other U.S. takeover attempts, some analysts said.

The company’s U.S. operations, which accounted for $1.9 billion in revenue out of the parent’s $6 billion, are based in Nutley, N.J.

One school of thought holds that a global consolidation in the pharmaceutical business is inevitable. SmithKline Beckman Corp. of Philadelphia and Beecham Group PLC of London have merger plans, and Monsanto Co. of St. Louis bought G. D. Searle in 1985. Eastman Kodak Co. took steps in January, 1988, to thwart Hoffmann-La Roche’s designs on Sterling.

The move would make it easier to exchange stock for shares in another company Hoffmann may seek to acquire, said Louis C. Webb, an analyst at Advest Group Inc. in Hartford, Conn.

‘Very Attractive’

“Drug makers are very attractive for acquisition,” he said.

The changes also could help pave the way for Hoffmann-La Roche to list its stock on U.S. exchanges, said Michael Martorelli, an analyst at Janney Montgomery Scott Inc. of Philadelphia. It trades only in Switzerland.

“Does it make it easier to list? Probably,” he said. “Will they list? That’s a different story.”

Hoffmann-La Roche’s chairman, Fritz Gerber, declined Monday to comment on whether the changes would ease the way for a takeover bid.

The new structure, to be proposed at the company’s annual meeting May 31 in Basel, Switzerland, would eliminate the automatic dual ownership of stock in both Swiss-based Roche Group and Sapac Corp. Ltd.

Under the 50-year-old arrangement, Sapac, incorporated in New Brunswick, Canada, was the holding company for subsidiaries in North and South America, Asia, Australia, the United Kingdom and part of Africa.

Now, Sapac would become a subsidiary of Roche Group, in which shareholders would own stock.

Further, the company would form Roche Holding Ltd., to become a parent of F. Hoffmann-La Roche, which would assume control of operations and liabilities.

The holding company arrangement “makes the corporation more transparent to the outside world,” the company said.

Finally, Hoffmann-La Roche said it would reorganize its shares to enlarge the stock base.