Roche Holding AG, Switzerland's largest drugmaker, offered to buy the rest of Genentech Inc. for $43.7 billion to gain the largest US maker of cancer medicines. Investors in South San Francisco, California-based Genentech would get $89 a share in cash, 8.8 percent more than the July 18 closing price, Roche said today. The Basel, Switzerland-based company already owns 56 percent of Genentech. Roche on Monday reported a decline in first-half profit as sales of the Tamiflu pill fell because governments stopped stockpiling of the medicine, one of only two drugs available to treat pandemic influenza. The proposed acquisition would be Roche's biggest ever and would result in the U.S.'s seventh-biggest drugmaker in terms of market share. Genentech, the world's second-biggest biotechnology company, has provided Roche with its best-selling Rituxan, Avastin and Herceptin cancer therapies “This makes a lot of sense,'' said Beatrice Kunz, a portfolio manager at Clariden Leu in Zurich who helps manage $147 billion in assets, including shares of Roche. “The weak dollar and the fact that they are not paying a huge premium make this rather attractive.'' First-half net income fell to 5.73 billion Swiss francs ($5.58 billion) from 5.86 billion francs a year earlier, Roche said today in a separate statement. Analysts surveyed by Bloomberg had a median net income estimate of 5.55 billion francs. Roche, which doesn't report quarterly profit, pushed up its earnings release from July 24. Group sales decreased 3.6 percent in the first half to 22 billion francs. Revenue from Tamiflu declined 71 percent to 327 million francs. “Roche has always been very smart in acquisitions,'' Romain Pasche, a fund manager at Vontobel Asset Management in Zurich, said before the announcement. “This conviction is reinforced by the fact that they have some of the best top-line growth in the industry and don't really need to do this acquisition. They would do it only if it really makes sense for shareholders.'' The purchase would be the biggest in the pharmaceuticals sector since Pfizer Inc.'s 2003 purchase of Pharmacia Corp. for about $64.3 billion in stock, according to Bloomberg data. The deal would be the biggest in the industry this year. The second- biggest so far this year is Teva Pharmaceutical Industries Ltd.'s July 18 bid to buy Barr Pharmaceuticals Inc. for $7.46 billion. Roche confirmed its outlook for an increase of almost 10 percent for group sales, with above-market rate growth in both its pharmaceuticals and diagnostics divisions. The forecast excludes sales of Tamiflu to governments and corporations. Roche said it expects core earnings per share to remain at least in line with the record level achieved in 2007. Genentech purchase would result in pretax savings of $750 million to $850 million a year and would add to EPS in the first year after closing.