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Glaxo SmithKline Beecham Merger

Glaxo Wellcome and SmithKline Beecham merged in 2000 to form Glaxo SmithKline. The merger of the two UK based global pharmaceutical companies led to the formation of the largest pharmaceutical company in the world. While the Monopolies and Mergers Commission okayed the deal, issues about job loss were raised by British trade unions. The merger provided a range of benefits to Glaxo SmithKline, the emerging company that helped it to evolve as a global leader.

The merger between Glaxo Wellcome and SmithKline Beecham, both UK based global pharmaceutical companies was executed in the year 2000. The emerging company named Glaxo SmithKline was not only the largest pharmaceutical company globally but also UK's largest company in any industry. That the merger assumed paramount significance in the pharmaceutical industry and in the UK economy as well can easily be understood from the gigantic proportions assumed by the emerging company.
The emerging company's vision was a global one reaching far beyond the confines of the UK market. As Jean-Pierre Garnier, the then designated chief executive of Glaxo SmithKline (the emerging company) put it, "The new company is global, proud of its roots in the UK and of its corporate domicile in the UK. But a world class competitor cannot operate all of its functions from a market that represents only 6 percent of its existence."

While the merger was not opposed by the Monopolies and Mergers Commission, British trade unions however raised the issue that two to five thousand jobs would be lost in the UK as a result of this merger. The global figure of job losses would be around 15,000 out of the total 105,000 strong workforce.

Five major benefits of the Glaxo SmithKline Beecham Merger that accrued to the emerging company Glaxo SmithKline were -
  • Greater marketing potential. The emerging company had 40,000 sales and marketing professionals. This included 8000 representatives in the United States of America.
  • Improved Research and Development (R&D). Both companies were leaders in pharmaceutical research especially in the fields of genomics and bioinformatics.
  • The emerging company had better consumer marketing techniques at its disposal.
  • A strong team for talented management.
  • The merger would lead to lower operational costs for the emerging company.
After the global merger, the Indian arms of both companies, Glaxo India Ltd and SmithKline Beecham Pharmaceuticals (India) Ltd also merged in the following year, 2001.

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Last Updated on : 29th July 2013

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