Glaxo Gets Signal For Integration Of Biddle Sawyer Cos

Glaxo India has obtained all regulatory approvals required for integration of the Biddle Sawyer group of companies, thus paving the way for the eventual merger with Glaxo.

An official spokesperson of the Rs 699 crore pharma multinational said ownership of the three companies, Meghdoot Chemicals Pvt Ltd, Biddle Sawyer Ltd and Croydon Chemical Works, has now been transferred to Glaxo India.

These approvals should clear one hurdle to the eventual complex series of mergers expected following the global merger of SmithKline Beecham with Glaxo Wellcome Plc.

In India, Glaxo and Burroughs Wellcome operate as two independent companies, while Smith-Kline has three companies, one owned 100 per cent for its merger. Glaxo is keeping the Biddle Sawyer group companies as a separate entity for the time being and they are likely to be merged with Glaxo later. The three companies, belonging to the Shah family, have been acquired for close to Rs 40 crore.

 

According to industry sou-rces, Biddle Sawyer's Colaba unit has been closed down and 10-15 workers shifted to the Kalyan unit. Glaxo India will now have to acquire only the Goregaon and Kalyan units.

Pharma analysts said in case of the global merger of SmithKline with Glaxo, the Indian subsidiaries will have to reduce the number of manufacturing sites in order to reduce overheads.

Meanwhile, on news of SmithKline Beecham Plc's merger with Glaxo Wellcome Plc, the Indian subsidiaries' scrip prices rose significantly on the bourses. On the National Stock Exchange , Burroughs Wellcome recorded the highest jump of close to ten per cent, closing at Rs 312.85 compared to Rs 285.35 on Friday.

Glaxo India closed four per cent higher at Rs 358.35 compared to Rs 344.15. SmithKline Beecham Pharma recorded a five per cent jump to close at Rs 578.85 compared with Rs 550.50 and SmithKline Beecham Consumer Healthcare rose by close to three per cent, to Rs 379.30 from Rs 369.40.

Disparities in salary

Industry sources said another factor to be considered is disparities in salaries at the two companies, Glaxo and SmithKline Beecham. Though the differences in wages paid to workers could not be ascertained, SmithKline Beecham offers over Rs 3.5 lakh to management students at the entry level and Glaxo offers close to Rs two lakh.

Sources said SmithKline is among the highest pay-masters in the pharma industry and that a solution will have to be found for the disparity.

as this is one of the major reasons why Burroughs Wellcome's merger with Glaxo has been held up.