Sir Richard Sykes, the Glaxo chairman, is believed to be keen to strike a deal to counter the threat posed by developments at Warner Lambert, which is at the centre of a bid battle between its US rivals American Home Products and Pfizer.
A deal between Warner Lambert and AHP or Pfizer would create a drug powerhouse which would have a bigger research & development capability than Glaxo Wellcome. Industry sources said a deal with SB would boost Glaxo's R&D spending, preserving its position as one of the world's leading pharmaceutical companies.
The original talks between the two companies foundered in February 1998 on a clash of personalities between Sir Richard and SB's chief executive Jan Leschly. Up to now, City analysts expected talks to resume next year following the expected departure of Mr Leschly.
However, the bid battle in the US is believed to have brought the issue of a merger to the top of Glaxo's agenda. Experts believe that if SB is unwilling to play ball, Glaxo could turn to another partner, such as Switzerland's Roche or the US group Bristol-Myers Squibb.
The revelation comes as Warner Lambert and AHP said yesterday they planned to spend as much as $3bn (pounds 1.8bn) on research and development. Sir Richard has long been an advocate of the benefits of scale economies in R&D.
There are few English-language merger candidates for Glaxo. It is thought to have had talks with Bristol-Myers Squibb, the US-based pharma giant, earlier this year. However, a US merger would be likely to see a change of domicile, which would doubtless infuriate the British government.
However, some analysts were sceptical that Mr Leschly would be willing to talk should Sir Richard put in a fresh call to SB. "It would mark a huge loss of face if Jan were to resume talks again. He's been talking up SB as an independent company with a rich pipeline," said one London- based analyst.
Meanwhile, the battle for Warner-Lambert took a twist yesterday as Pfizer, its US rival, revealed it had trumped AHP's $72bn offer with an $82.4bn all-paper bid. Pfizer's intervention comes despite AHP and Warner-Lambert agreeing a $2bn break-up fee for ending their deal.Reuse content