Roche’s $43.7 billion (£21.8 billion) takeover of the 41 per cent of Genentech it does not already own was yesterday met with a lawsuit claiming that the deal short-changed shareholders.

Switzerland’s Roche announced on Monday that it had agreed with Genentech’s management to pay a 9 per cent premium to Genentech’s latest closing price for the outstanding shares, a transaction that most analysts said undervalued the US biotechnology company.

The lawsuit, filed in Delaware Chancery Court last night, named Roche, Genentech and Arthur Levinson, its chief executive, among the defendants. Cohen Milstein Hausfeld & Toll, the law firm representing the shareholders, said that the proposed buyout was on unfair terms and short-changed Genentech shareholders. The suit names Ira J Gaines, a shareholder, as the plaintiff.

Roche could not be reached for comment. Severin Schwan, Roche’s chief executive, had, on Monday, called the $89-a-share offer “fair and generous” and said there was little room for negotiating a higher price.

Under the deal, Roche would gain all revenue from Genentech’s cancer drugs Avastin and Herceptin as several of its medicines come under threat from generic competitors.

Roche, which has had a stake in Genentech since 1990, said that a combined entity would generate more than $15 billion in annual revenue and would employ about 25,000 people in the United States. The company did not specify how many of Genentech’s 10,700 employees would be retained.

Roche said on Monday that it expected the deal to be concluded “as soon as possible”, that it would generate annual pre-tax cost benefits of between $750 million and $850 million and would add to earnings per share in the first year.

Franz Humer, Roche’s chairman, said that a takeover would improve operational efficiency by reducing complexity, eliminating duplications and increasing scale in the US. “Combining the strengths of Roche and Genentech will create significant value and result in benefits for patients, employees and shareholders,” he said.

Genentech, founded in 1976, claims to be the world’s first biotechnology company.

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