Speaking of the website, the AHP/SBH merger has generated quite a bit of interest (over 8000 hits in the past week), and I expect more action this week. Here's an older article from the San Diego Union Tribune:
SmithKline, American Home discuss merger; would be
biggest ever
ASSOCIATED PRESS
21-Jan-1998 Wednesday
NEW YORK -- SmithKline Beecham PLC and rival drug maker American Home
Products Corp. said yesterday they are considering the biggest corporate
merger ever, sending stocks of other pharmaceutical companies higher as
Wall Street poised for another round of merger mania.
Investors speculated that if two of the world's biggest drug makers
combine, the deal would set off a repeat of the drug industry's 1996 frenzy
among drug makers.
"There will be another wave of consolidation," said Hemant K. Shah, an
independent drug industry analyst in Warren, N.J. "If this goes through,
some other companies will have to think. How do you compete?"
In separate statements, American Home and SmithKline Beecham said there are
no guarantees the talks will lead to a merger. The drug makers declined
further comment until the discussions are concluded.
It remains unclear how the deal would be structured, but analysts say the
combined company would likely be a merger of equals based somewhere in the
corridor that stretches from New York to Philadelphia.
At yesterday's stock price, American Home is worth about $58 billion. If
SmithKline, valued at more than $63 billion, were to buy American Home, the
deal would eclipse the most expensive merger announced to date, the planned
buyout of MCI Communications Corp. by WorldCom Inc. for stock valued at
about $37 billion.
The combined company would have sales of about $24 billion, giving it the
most health-care revenues of any company. Five other companies, including
Nestle, have more overall sales, but much of their revenue comes from
outside the health care business.
"On top of that they will become the leading consumer brand company in
over-the counter products," Goldman Sachs analyst Prem Lachman said.
A merger would also unite two companies divided by history and an ocean.
Madison, N.J.-based American Home -- whose vast product line includes
Robitussin cough medicines, Advil pain relievers and the nation's
most-prescribed drug, the estrogen compound Premarin -- is 82-years old.
Its drug-making division, Wyeth-Ayerst Laboratories, goes back to 1860,
when John Wyeth and his brother Frank established a drugstore in the unit's
current home of Philadelphia.
London-based SmithKline -- maker of the antidepressant Paxil and
over-the-counter products such as Aquafresh toothpaste, Geritol vitamins,
the Nicoderm anti-smoking patch and Tum's antacids -- was created in the
1989 merger of SmithKline Beckman Corp. and Britain's Beecham Group PLC.
Its roots go back to 1830, when John K. Smith opened his first drugstore in
Philadelphia, where the company keeps its U.S. headquarters. |
