Financial Daily from THE HINDU group of publications
Thursday, Mar 11, 2004
Mergers & Acquisitions
Glaxo, Burroughs Wellcome boards to meet on merger
Mr Deepak Parekh (right), Chairman, GlaxoSmithKline Pharmaceuticals Ltd, with Mr Ajay Nadkarni, Company Secretary, addressing the company's AGM in Mumbai on Wednesday. Paul Noronha
Mumbai , March 10
THE long-pending merger of GlaxoSmithKline Pharmaceuticals Ltd (GSKPL) and Burroughs Wellcome (India) Ltd (BWIL) looks finally set to formalise in India, almost nine years after the two British companies merged globally in 1995.
With niggling issues regarding BWIL's Mulund plant being resolved, the boards of the two companies are scheduled to meet on March 17 to discuss issues related to the merger, the GSK Chairman, Mr D.S. Parekh, told shareholders here on Wednesday.
Two external firms - Ernst & Young and Deloitte - have been appointed to do the evaluation and they would make a presentation to the boards on the swap ratio, he said responding to shareholder queries at the company's 79th annual general meeting (AGM).
"The global merger had taken place in 1995 and the process of integration had been done immediately at all other locations except India. We hope the process of merger would be completed in India by September and it would be effective January 1, 2004."
Sidestepping questions on a bonus issue before the merger was effected, he said: "We will look at a bonus at the right time. Our first priority is to get the merger through. We have been acting as a single company as far as sales-force and marketing is concerned. What is left is to integrate the balance sheets."
The merger in India ran into rough weather with employees at BWIL's Mulund plant opposing unified wages.
However, that later got resolved with the company offering a voluntary separation scheme and the Mulund plant was subsequently closed.
Speaking to newspersons after the AGM, Mr Kalyanasundaram, GSK's Managing Director in India, said that the operational integration had been undertaken progressively following the global merger and the process was completed by 1997-98.
All rationalisation processes of workforce and products had also been completed.
What is left is purely procedural, he said.
The UK-based parent company, GlaxoSmithKline Plc holds 49 per cent equity in GSKPL and 51 per cent in Burroughs Wellcome.
`No deal yet on Worli plant sale'
IN a bid to put a lid on market talk regarding the sale of GSK's Worli plant, GSKPL's Chairman, Mr D.S. Parekh, said: "The deal is not yet concluded."
He told shareholders that of the four preferred bidders who were short-listed, exclusive talks were on with one of them. Property deals are generally "time-consuming" and lawyers on both sides are working out details of the estimated Rs 100-crore deal, he added.
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