its $11 billion purchase of Bermuda-based Corange Ltd. after the Swiss drugmaker agreed to sell or license some of its diagnostics products.

The largest takeover in Roche's 101-year history gives it ownership of German diagnostics company Boehringer Mannheim GmbH, making Roche the world's sixth-largest drugmaker and the world's largest diagnostics company. To complete the purchase, Roche needs US Federal Trade Commission approval.

Roche dividend right certificates rose to a record after the company said the divestitures won't have a significant impact on sales, while the European commission said the concessions will prevent the enlarged company from squeezing competitors out of the European diagnostics market.

"All in all, it's a very, very favourable decision for Roche,'' said Genghis Lloyd-Harris, an analyst at Credit Suisse First Boston who rates Roche a "hold,'' since the impact of concessions Roche made will be limited. Roche securities gained as much as 1.6 percent to 16,240 Swiss francs, an intra-day record, and closed 215 francs higher at 16,190 francs, an all-time closing high.

Roche agreed to sell a system which is used to analyse body fluids in making diagnoses called the Cobas Mira line, and to license its proprietary DNA probe technology called PCR, which detect DNA in viruses and bacteria and are used in the diagnosis and treatment of diseases such as AIDS.

"It will mean a decline in sales in Europe, but we expect stronger sales in the US, Asia and in emerging markets to make up for that,'' said Roche spokesman Roland Haefeli. "We wouldn't expect a decline in overall sales.'' While Roche doesn't disclose sales of the Cobas MIRA line, analysts estimated sales could be up to 350 million Swiss francs ($245 million) per year. The combined company's diagnostics sales would have been about 3.5 billion francs.

Without the concessions, the combined companies would have assembled market shares of 40 percent to 80 percent in clinical chemistry, or products used in clinical trials of pharmaceutical products, in Austria, Denmark, Germany, Finland, Portugal, Spain and Sweden, the EU commission said.

"Roche has built a dominant position in this market in all member states,'' said the commission that enforces European antitrust policy. "The commission found that the merger would have strengthened this position even further.'' Competitors and anti-trust regulators were more worried by the merged company's potential control of intellectual property rights than by its market share, since unpatented products are easily copied by rivals, said Romano Subiotto, a lawyer specialising in EU law and the pharmaceutical industry at the firm Cleary, Gottlieb, Steen & Hamilton.

When Roche announced the takeover plan in May, Chairman Fritz Gerber said a closer cooperation between its drugs and diagnostics division will help Roche "emerge stronger from current health-care reforms.'' These reforms, for example in the US, have led to cost pressure on drugmakers everywhere. Roche has also said it expects the acquisition to bring annual savings of 1 billion francs as it cuts up to 5,000 jobs.

"Boehringer will give Roche critical mass in the diagnostics market,'' said Thomas Lusetti, a fund manager for Coutts Bank (Schweiz). "There's also a potential for cutting costs. In this area, they have strengths that others don't.'' The purchase of Corange also gives Roche a stake of more than 80 percent in Warsaw, Indiana-based DePuy Inc., an orthopaedics products maker. While Roche hasn't said whether it wants to keep the holding, analysts expect Roche to sell it as it does not fit into the company's main businesses.

The European commission has the power to block or force changes to mergers and acquisitions of companies with combined global sales of 5 billion European currency units ($5.7 billion) or EU revenues of 250 million Ecu each.