Business Comment: GEC backs drugs tsar to inject some fizz

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The Independent Online
The markets have been kinder to John Mayo than George Simpson. When the new managing director of GEC produced his blueprint for change the share price promptly fell. Yesterday it ticked up after GEC announced that the finance director of Zeneca has been brought on board to help execute the plan.

The youthful Mr Mayo (he is still only 42) has apparently been hired because of his reputation for corporate activity. This must refer to Mr Mayo's life before he became the drug company's finance director because, while he has presided over a positively mind-expanding rise in the share price, bids and deals have been thin on the ground over the last five years

What Mr Mayo, then a corporate financier with Warburgs, did help engineer, however, was the demerger of ICI in 1993, after being drafted in to defend the group from the attentions of Lord Hanson.

He has presumably been brought on board to help GEC do the splits in the form of a separate listing for its jointly owned engineering business GEC Alsthom, provided the French agree to play ball and take the cash for their half of the business.

That will prove the easy bit in the grand scheme of things. The toughest nut to crack remains the task of finding partners for the defence electronics business GEC Marconi in a world rife with national chauvinism and monopoly complications. Mr Mayo has demonstrated his ability to cut a company in half but his real test will lie in growing Marconi in size. Even after yesterday's rise, the shares are still below their level before Mr Simpson's blueprint emerged.

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