Galen clinches merger with US group

Galen Holdings, the Irish drugs company specialising in women's healthcare, yesterday clinched its long-awaited US acquisition - adding Bill Gates to its share register in the process.

The Irish pharmaceuticals group, which also provides laboratory services, is to merge with Warner Chilcott, which was once part of American pharmaceuticals group Warner-Lambert.

Warner Chilcott, based in Dublin and listed on Nasdaq, also specialises in women's healthcare. It recently acquired a range of oral contraceptives from Bristol-Myers Squibb.

Bill Gates's 12 per cent stake will become a 3 per cent stake in the enlarged group. There will be no job losses in the deal, the groups said, and the board would be enlarged to accommodate their executives.

Warner Chilcott's chief executive, Roger Boissonneault, is to become chief executive of the combined group. John King, Galen's chief executive, steps up to be executive chairman. The Galen chairman, Allen McClay, becomes non-executive president.

A Galen spokesman said the executive chairman would be responsible for UK operations, while the chief executive would run the American activities.

Mr Boissonneault dismissed suggestions that the deal was struck for management above shareholders' heads. "There was no shortage of biotechnology companies with inflated share prices knocking on our door. We could have got a higher price in the short term, but not the long term. This is a great fit."

Galen has been looking for a US deal to help it market its products in the region, while Warner Chilcott was looking for a way into Europe. The deal will boost its pipeline of products through the addition of Galen's intravaginal ring, a system for delivering hormone replacement therapy. Galen has also sought a marketing-driven deal after failing to buy Ferring of Sweden two years ago.

Warner Chilcott shareholders are to receive 2.5 new Galen shares for every Warner share. Galen shares closed down 50p at 562.5p, valuing the combined company at £951m.