A merger between National Health Laboratories and the clinical laboratory business of Roche Holdings would create a new giant in a $30 billion industry.
La Jolla, Calif.-based National Health and Roche, a Swiss company, announced merger plans last week. With combined annual revenues topping $1.7 billion, the new company will be the nation's largest clinical lab operator. The current industry leaders, Corning and SmithKline Beecham, will be nearly as large.
In the past two years, nearly every publicly traded U.S. laboratory chain has been part of an acquisition or merger. The industry has been hit hard by managed care, a drop in lab service use and a federal probe of billing practices.
Under the terms of the agreement, National Health shareholders would receive $5.60 in cash and 0.72 of a share in the new company for each National Health share. Roche would control 49.9% of the company. It would contribute $187 million in cash and its Burlington, N.C., subsidiary Roche Biomedical Laboratories.