Outlook: Glaxo Wellcome

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The Independent Online
THE DECISIVE manner in which Sir John is building his oil empire contrasts starkly with the series of abortive merger attempts made by Glaxo Wellcome's Sir Richard Sykes. First he failed to tie the knot with SmithKline Beecham after falling out with Jan Leschley on the way up the aisle. Now his overtures to an an American bride, Bristol Myers Squibb, have come to nought.

There again, perhaps the dalliance with the Americans was merely designed to lure SmithKline Beecham back to the negotiating table. As every lover knows, there is nothing like jealousy to spice up a flagging relationship. If nothing else, we may at last discover if Mr Leschly's new-found love for independence is for real or just tactical talk while he bides his time until departing.

Sir Richard's end-game is known. He wants to build Glaxo into the world's largest drug company with 10 per cent of the market as quickly as possible. According to figures released yesterday by the consultancy IMS Health, Glaxo is number three in the world, within spitting distance of the leaders Novartis and Merck.

The UK company could reach the top through organic growth, but to get from the present 4 per cent market share to the magic 10, Sir Richard needs a deal. He, and the City, would like it to be with SKB, but if that doesn't materialise, Sir Richard is prepared to talks to others, as the Bristol Myers Squibb discussions show. Given Glaxo's strong hand, it is time for the other players and particularly SmithKline to end their bluffs and put their cards on the table.