Updated from 3:19 9.m. EDT

And at $95, Roche and Genentech ( DNA) said, "Done deal."

The Swiss drug giant and its smaller, yet arguably more valuable northern California biotech cousin finally agreed to terms early Thursday on a takeover deal that has hogged the attention of health care investors since last summer.

Roche agreed to purchase the remaining 44% of Genentech it doesn't already own for $95 a share - a final price that met with the approval of Genentech's board.

At $95, Roche is paying $46.8 billion for its new Genentech stake and just under 7% more than the company's original $89-a-share offer in July.

Roche still needs to convince a majority of Genentech's minority shareholders to tender their shares, but with Genentech's board recommending Roche's bid that should no longer be a significant hurdle.

"We believe this is a fair offer for Genentech shareholders, and the committee is pleased to come to a successful conclusion of this process," said Charles Sanders, chairman of the special committee of Genentech's board. "We look forward to working with Roche to complete the transaction as expeditiously as possible."

The denouement of Roche's seven-month quest to wrest full control of Genentech, the world's most successful biotech company by several measures, follows by a few days Merck's ( MRK) $41 billion merger with fellow drug maker Schering-Plough ( SGP). Like Pfizer's ( PFE) $68 billion acquisition of Wyeth ( WYE) six months ago, all these deals have in common a large pharmaceutical company seeking new growth opportunities from biotech.

Unlike the Merck and Pfizer deals, however, Roche is not just taking baby steps into biotech, but is essentially becoming one in full cloth. Roche already sells Genentech drugs outside the U.S. and Genentech drugs account for about 66% of Roche's revenue today. When Roche takes over Genentech completely, Roche will be the world's largest biotech company.

Cognizant that the Genentech imprimatur has real value for investors, doctors and patients, Roche intends to rebrand itself in the U.S. under the Genentech banner and consolidate its U.S. operations at Genentech's existing South San Francisco campus.

One big outstanding question for Roche is whether the company can retain the science and research driven corporate culture that made Genentech so successful. If Genentech's scientists decide to leave in droves, Roche's victory may be for naught.

The mutually agreeable $95-a -share offering price was reportedly locked down in meetings between Roche and Genentech over the weekend. The two sides came back to the negotiating table after Roche upped its proposed bid to $93 a share Friday.

Before that, both sides were far apart on deal terms. Genentech rejected Roche's original offer as too low, counter-proposing a price of $112 a share. Roche then lowered its bid to $86.50 via a hostile tender that tried to entice Genentech's minority shareholders directly.

Genentech is the largest biotech company by stock market capitalization and net income generated, and trails only Amgen ( AMGN) in annual revenue. Genentech also is the No. 1 drug company in the world ranked by oncology sales because of three blockbuster drugs - Rituxan, Herceptin and Avastin.

Sales of the cancer drug Avastin, which totaled $2.69 billion in 2008, could grow to $10 billion by 2015, Genentech said at an investor meeting last week. About half of that long-range forecast for Avastin comes from using the drug much earlier in a patient's cancer treatment, or the so-called adjuvant setting. Data from the first of many Avastin adjuvant phase III studies, in patients with colon cancer, is expected next month.

Both Roche and Genentech had something to gain by agreeing to a takeover deal before the adjuvant Avastin data is released. If positive, Genentech's stock price could have easily risen to over $100 a share, making Roche's job much more difficult and expensive. Likewise, if the Avastin study failed, Genentech shareholders risked a falling stock price and the threat that Roche would lower its bid once again.

The loss of Genentech as a standalone biotech firm creates a vacuum in the group that must be filled. Genentech's minority investors, collectively, now have between $40 billion and $50 billion in capital to reinvest somewhere. How much of that will flow back into biotech, or, more specifically, the other large-cap biotech stocks like Celgene ( CELG), Gilead Sciences ( GILD), Genzyme ( GENZ), Biogen Idec ( BIIB) and Amgen remains to be seen.

Shares of Genentech closed Thursday's trading session up 1.9% to $93.92.

At the time of publication, Feuerstein's Biotech Select model portfolio was long Genentech.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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