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Family control lessens at Roche

Family-controlled pharmaceutical giant Roche said on 25 March that a member of the family shareholding group has dropped out of the pool, causing the family to lose its voting majority.

The Basel, Switzerland-based company said in a statement that family member Maja Oeri, who has 5% voting rights, dropped out of the group – called the voting pool – reducing the family pool’s voting power to 45% from 50%.

Roche gave no reason for her exit but said that she will be an independent shareholder with the company. Following her exit, the voting pool will now consist of eight family members and the family’s charitable foundation.

While some analysts say that the loss of voting control could make the group more vulnerable to a takeover, a spokesperson for Roche said this was not the case. “The family pool still has a significant stake in Roche. If there were any takeover requests, it would need the votes of the family members, of Novartis, which holds a 33.3% stake, and of other free shareholders. The pool still remains committed to Roche’s independence.”

He added: “The change (in voting control) is only a relative change and not an absolute one.” When asked about any plans to regain majority voting control, the spokesperson refused to comment on the future.

While the family pool still remains the largest single shareholder in the company, any further drops from the pool will significantly affect family control of Roche. The company should take note of the recent restructuring in fellow family-controlled French luxury goods company Hermes. In January the group created a holding company for its family shares to protect itself from a possible takeover by rival company LVMH, which is only possible if the family works together.

Roche was founded in 1896 by Fritz Hoffmann-La Roche, and the family shareholding pool was established in 1948. The family also controls around half of the company’s non-voting shares. Originally started as a small company manufacturing vitamin C, Roche has transformed into a global health care company with 2010 revenues of $5.14 billion.

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