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To: celeryroot.com who wrote (15734)	2/23/1998 7:26:00 PM
From: tonyt	Respond to of 32384

Here's what CNNfn had to say ;-) NEW YORK (CNNfn) - Less than a month after announcing talks had begun, SmithKline Beecham Plc and Glaxo Wellcome Plc Monday canceled their proposed $70 billion merger. In a stunning announcement, the companies said the decision came after they were unable to agree on terms following the original January 30 announcement. "The Board of SmithKline Beecham is aware of the significance of this decision, particularly in light of the January 30 public announcement and the substantial increase in the market capitalization of both SB and Glaxo," the company said in a statement. "After careful consideration, however, the board has unanimously decided that it is unable to recommend the proposed merger to its shareholders and discussions have therefore been terminated. The board of SB no longer believes that the merged group would be able to operate in such a way as to produce superior performance for shareholders." Both companies stunned the pharmaceutical industry on January 30 when they announced they were in merger talks. However, in subsequent meetings, SmithKline said the two companies could not reach an agreement on a number of important issues. "The discussions since February 20 have revealed a number of differences between the companies, including differences in the approach to the possible merger, management philosophy and corporate culture," the company said. "Most importantly, Glaxo's (GLX) recent conduct of these discussions has inevitably strained relations between the two companies. The board of SB has unanimously reached the view that insurmountable differences have arisen which would undermine the effective management of the merged group and impair its ability to deliver the shareholder value creation fundamental to the merger." A merger between the two London-based giants would have created the world's largest pharmaceutical group, with combined sales of more than $25 billion - about 8 percent of the global market. At the time the deal was announced, analysts speculated it would likely spark an industry-wide consolidation. The decision to cancel merger talks marked the second time SmithKline (SBH) has walked away from the bargaining table in the last month. On January 30, SmithKline terminated merger talks with American Home Products Corp. (AHP) and announced it was negotiating with Glaxo. home \| deals \| hot stories \| contents \| search \| stock quotes \| help Copyright c 1998 Cable News Network, Inc. ALL RIGHTS RESERVED.

To: celeryroot.com who wrote (15734)	2/23/1998 7:34:00 PM
From: tonyt	Respond to of 32384

Non-Merger Mania continues... Here's what Reuters had to say: Reuters, Monday, February 23, 1998 at 19:02 NEW YORK, Feb 23 (Reuters) - American depositary receipts of Glaxo Wellcome Plc fell by nearly two and a half points in late after-hours trading Monday, following the British drug company's announcement that it had broken off merger talks with SmithKline Beecham (NYSE:SBH), traders said. Glaxo's ADRs closed at 62-7/16 but slipped to 60 shortly after the company said it nixed what was to be the biggest business deal in history. ADRs of SmithKline Beecham were trading at 66, unchanged from their closing price, after the company said the merger was off, a trader said. Shares of American Home Products (NYSE:AHP) were unchanged by the news, trading at their closing price of 91-1/2, a trader said. Dealers said other American pharmaceutical stocks such as Pfizer Inc (NYSE:PFE), Warner-Lambert Co (NYSE:WLA) and Merck & Co Inc (NYSE:MRK) traded near their closing prices after the break up of the deal. SmithKline said the merger talks with Glaxo ended because the British companies were unable to complete the terms of the deal, citing "insurmountable" differences between them. Copyright 1998, Reuters News Service Companies or Securities discussed in this article: Symbol Name NYSE:GLX Glaxo Wellcome Plc ADS NYSE:SBH Smithkline Beecham Plc Ord Shs NYSE:AHP American Home Prods Corp NYSE:PFE Pfizer Inc NYSE:WLA Warner Lambert Co NYSE:MRK Merck & Co Inc c 1998 Quote.com, Inc. All Rights Reserved.

To: celeryroot.com who wrote (15734)	2/23/1998 7:35:00 PM
From: tonyt	Respond to of 32384

Here's what the Associated Press had to say: AP Online, Monday, February 23, 1998 at 18:48 By JOHN HENDREN AP Business Writer NEW YORK (AP) - Drug maker SmithKline Beecham PLC called off merger talks with Glaxo Wellcome PLC, citing ''insurmountable differences'' in putting together what would have been the biggest corporate combination in history. The talks ended Monday evening in London, Glaxo spokesman Rick Sluder said, without elaborating. In its announcement, SmithKline said the negotiations began falling apart Friday after Glaxo sought to change terms of a tentative deal announced Jan. 30. That created ''insurmountable differences'' that left the two British drug makers ''unable to agree on the terms of a possible merger,'' SmithKline said. Discussions since Friday, it said, ''revealed a number of differences between the companies, including differences in the approach to the possible merger, management philosophy and corporate culture.'' ''Most importantly, Glaxo's recent conduct of these discussions has inevitably strained relations between the two companies,'' it said. SmithKline said its board unanimously decided against recommending to shareholders a merger in which the company would have been the junior partner. On Jan. 30, SmithKline had announced it was calling off talks with American Home Products Corp. in favor of a potential deal with Glaxo, sending the stocks of both British pharmaceutical companies surging. SmithKline said it was ''aware of the significance'' of calling off the merger. SmithKline had a market value of about $70 billion and Glaxo Wellcome $96 billion when the talks were announced. If Glaxo Wellcome had bought SmithKline, the deal would have eclipsed the most expensive merger announced to date, the planned buyout of MCI Communications Corp. by WorldCom Inc. for stock valued at about $37 billion. Sluder, the Glaxo spokesman, said, ''We're not actively looking for another merger partner.'' Many analysts had considered the merger a fait accompli because all major issues appeared resolved. The original plan decided senior management positions, gave Glaxo a majority 59.5 percent share and left the merged company in the United Kingdom. But last Friday, Glaxo negotiators said they were no longer willing to go ahead on those terms, SmithKline officials said. The mammoth drug makers had viewed merging as a way to boost their research and development budgets. The cost of developing a single drug has bolted from $54 million in 1976 - or an inflation-adjusted $125 million - to a range of $400 million to $600 million today, according to Pharmaceutical Research & Manufacturers of America, a drug industry trade group. Drug makers in the United States and Europe will spend an estimated $20.6 billion on research this year, or about 20 percent of sales. Costs are rising because genetic engineering, stricter Food and Drug Administration requirements and inflation have combined to make searching for drugs more expensive, said Jeff Trewhitt, a spokesman for the trade group. A combined Glaxo and SmithKline would have sunk $3 billion into research and development. That compares with $1.8 billion for Novartis AG and $1.5 billion each for Merck & Co. and Pfizer Inc. Companies or Securities discussed in this article: Symbol Name NYSE:SBE Smithkline Beecham P L C NYSE:GLX Glaxo Wellcome Plc ADS NYSE:AHP American Home Prods Corp NASDAQ:MCIC Mci Communications Corp NASDAQ:WCOM Worldcom Inc NYSE:MRK Merck & Co Inc NYSE:PFE Pfizer Inc c 1998 Quote.com, Inc. All Rights Reserved.

To: celeryroot.com who wrote (15734)	2/23/1998 7:37:00 PM
From: tonyt	Respond to of 32384

PR Newswire: PR Newswire, Monday, February 23, 1998 at 18:02 PHILADELPHIA, Feb. 23 /PRNewswire/ -- The Board of SmithKline Beecham plc ("SmithKline Beecham") (NYSE:SBH) today announces that SmithKline Beecham and Glaxo Wellcome plc ("Glaxo Wellcome") (NYSE:GLX) have been unable to agree on the terms of a possible merger between the two companies and that the discussions which were announced on January 30, 1998, have been terminated. The Board of SmithKline Beecham is aware of the significance of this decision, particularly in light of the January 30 public announcement and the substantial increase in the market capitalization of both SB and Glaxo. After careful consideration, however, the Board has unanimously decided that it is unable to recommend the proposed merger to its shareholders and discussions have therefore been terminated. The Board of SB no longer believes that the merged group would be able to operate in such a way as to produce superior performance for shareholders. The Boards of SB and Glaxo announced on January 30 that SB and Glaxo were in detailed discussions with a view to merging the two companies and creating the world's largest pharmaceutical group. The announcement stated that the value split had been agreed and that the Board of the combined group would be drawn from the Boards of both companies. In addition, the five executive directors were named. Prior to the announcement, there had been detailed, documented discussions and agreement in relation to the roles of the five executive directors, and of other of the intended executives of the combined group. Discussions reaffirming the agreed key management roles took place on a number of occasions between the parties after the announcement. However, on February 20, Glaxo indicated that it was not prepared to proceed on the agreed basis. In discussions since then, and despite considerable effort on the part of SB, including initiating a dialogue between SB's non-executive Chairman and Glaxo's non-executive Deputy Chairman, Glaxo has been unwilling to proceed in accordance with the agreed arrangements. The discussions since February 20 have revealed a number of differences between the companies, including differences in the approach to the possible merger, management philosophy and corporate culture. Most importantly, Glaxo's recent conduct of these discussions has inevitably strained relations between the two companies. The Board of SB has unanimously reached the view that insurmountable differences have arisen which would undermine the effective management of the merged group and impair its ability to deliver the shareholder value creation fundamental to the merger. SOURCE SmithKline Beecham -0- 02/23/98 /CONTACT: Media, Richard Koenig, 215-751-3415, or Investor Relations, Richard Williams, 215-751-7002, both of SmithKline Beecham/ /Company News On-Call: prnewswire.com or fax, 800-758-5804, ext. 801350/ /Web site: sb.com Companies or Securities discussed in this article: Symbol Name NYSE:SBH Smithkline Beecham Plc Ord Shs NYSE:GLX Glaxo Wellcome Plc ADS c 1998 Quote.com, Inc. All Rights Reserved.

To: celeryroot.com who wrote (15734)	2/23/1998 7:38:00 PM
From: tonyt	Read Replies (1) \| Respond to of 32384

....and here's what Dow Jones had to say (Whew!): PHILADELPHIA -(Dow Jones)- SmithKline Beecham PLC and Glaxo Wellcome PLC late Monday said they had terminated merger discussions because they were unable to agree on the terms of a possible deal. The combination of the two British pharmaceutical giants, valued at about $65 billion, would have represented the largest corporate marriage ever. SmithKline Beecham (SBH) said its board "is aware of the significance of this decision, particularly in light of the January 30 public announcement (of the talks) and the substantial increase in the market capitalization of both SB and Glaxo." London-based SmithKline indicated that the talks foundered, at least in part, on the makeup of the combined board. SmithKline Beecham said that after careful consideration, however, the board has unanimously decided that it is unable to recommend the proposed merger to its shareholders. For its part, Glaxo said only that "discussions on the proposed merger with SmithKline Beecham PLC have been terminated." The proposed combination announced late last month was tentatively valued at between $65 billion and $70 billion, and would have created the world's largest drug maker, with annual sales of more than $25 billion. That would have topped sales of the closest rivals, Merck & Co. and Novartis AG. The proposed merger would have formed the largest research and development organization in the global health-care industry. At the time, the announcement of the talks prompted a wave of merger speculation in the pharmaceutical industry and a run-up in drug stocks. Before the British drug giants announced their tentative deal, American Home Products Corp. had been in talks with SmithKlin, but apparently lost out. SmithKline Beecham said Monday that its board no longer believes that the merged group would be able to operate in such a way as to produce superior performance for shareholders. SmithKline said that there had been discussions and agreement in relation to the roles of the five executive directors of the companies' new combined board, and of other of the intended executives of the combined group. But SmithKline said that on Feb. 20, Glaxo indicated that it wasn't prepared to proceed on the agreed basis. In discussions since then, SmithKline said Glaxo "has been unwilling to proceed in accordance with the agreed arrangements." SmithKline said discussions since Feb. 20 have revealed "a number of differences between the companies," including differences in the approach to the possible merger, management philosophy and corporate culture. It said Glaxo's recent conduct of these discussions "has inevitably strained relations between the two companies" and that "insurmountable differences" have arisen which would undermine the effective management of the merged group. Analysts had generally expect a merger of Glaxo and SmithKline would proceed smoothly, clearing regulatory scrutiny. Under the proposed deal, Glaxo shareholders were to receive 59.5% of the merged company, while SmithKline shareholders would receive 40.5%. In contrast to drug megamergers in the early 1990s that were driven by cost-cutting, this round was thought to be sparked by a desire to exploit scientific advances. An explosion in breakthroughs has suddenly created vast research opportunities that are overwhelming drug companies' budgets and management expertise. New gene-sleuthing technology, when combined with high-speed, computerized chemistry, is producing countless tempting leads for treating illnesses ranging from AIDS to cancer, from heart disease to depression. A Glaxo-SmithKline merger would have created a behemoth with a research-and-development budget of more than $3.3 billion, nearly twice Merck's. Gene hunting "is yielding a cornucopia the likes of which the drug industry has never seen," said William Haseltine, chief executive of Human Genome Sciences Inc., after the talks were revealed last month. Genome is a leading gene-discovery company with which SmithKline has collaborated. The former merger partners have many new products in the pipeline. Some of Glaxo's late-stage projects include medications for AIDS, infections and influenza; SmithKline is testing drugs or vaccines for Alzheimer's, diabetes and Lyme disease. Possible areas of concern for European Union and U.S. regulators were said to have included the strong position held by the companies in certain cancer drugs, antiviral drugs and perhaps antibiotics. Glaxo and SmithKline have competing drugs to fight ulcers - Glaxo's Zantac and SmithKline's Tagamet. They also have competing herpes drugs, Glaxo's Zovirax and SmithKline's Famvir. The companies also overlap in the area of cancer therapy, and each has an estrogen-replacement drug for women in its pipeline. Ordinarily, that kind of head-to-head competition which would be lost from a merger would raise red flags from regulators. But the patents on Zantac, Tagamet and Zovirax have expired, and a host of rivals are offering generic versions. With that much competition, regulators were thought to be less likely to object to the loss of competition, attorneys said. At $65 billion to $70 billion, the pricetag on the merger would have been almost twice the size of WorldCom Inc.'s planned takeover of MCI Communications Corp. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved. Companies or Securities discussed in this article: Symbol Name NYSE:GLX Glaxo Wellcome Plc ADS NYSE:SBH Smithkline Beecham Plc Ord Shs ISEL:GLX ISEL:SB c 1998 Quote.com, Inc. All Rights Reserved.