Outlook: Leschly to go

SO FAREWELL then, Jan Leschly, Britain's first pounds 15m-a-year chief executive. London's corporate scene will be a greyer and duller place without the former Danish tennis star to entertain us. But, hey, who cares if it hastens the eventual, and in the City's view, inevitable, merger between Mr Leschly's SmithKline Beecham and Glaxo Wellcome. That, in any case, was the stock market's reaction to final confirmation yesterday that Mr Leschly will be hanging up his racket at the AGM next April, six months earlier than his official retirement date.

At just 59, you wouldn't expect him to be retiring from business entirely, of course, and he's not. Instead, he's off to join his sons, selling healthcare and pharmaceuticals across the Internet, where he can confidently expect to make a good deal more money than ever he did as a SmithKline Beecham wage slave.

Even so, it is a bit of mystery as to why he's severing all connections with SmithKline, a company whose market capitalisation has grown fivefold since he became chief executive six years ago. Why didn't the board make him non-executive chairman in succession to Sir Peter Walters, who at 68 is indisputably of an age where retiring to the country with the labradors might seem the appropriate thing? The official explanation is that no SmithKline executive ever gets a non-executive position, and that's policy.

Well maybe, but the City has a different explanation. Rightly or wrongly, Mr Leschly is seen as the main barrier to a value-enhancing merger with Glaxo Wellcome. Mr Leschly wanted to run the combined group out of Philadelphia, according to American management rules, lines of command and salary rates. Glaxo's Sir Richard Sykes thought that entirely inappropriate for a company that both culturally and operationally is British based.

With Mr Leschly gone and the apparently more compliant Jean- Pierre Garnier in the hot seat, there may be an opportunity for a fresh start. Again, that's the theory. The reality could be rather different. As Pfizer and Warner Lambert are proving in the US, bringing together two fiercely independent and competitive drugs companies is a profoundly difficult thing to pull off, however compelling the commercial logic. And although Tony "national champions" Blair, seems to have largely bought the case for hegemony under Sir Richard's banner, it is not clear that the competition authorities or the science establishment will take the same view.

The argument for putting together two top-drawer research and development companies is essentially the same as that of merging two top-performing football teams - together they would be a real world-beater. Well possibly, but just imagine what would happen if you merged Tottenham Hotspur with Arsenal. Civil war, and a side that would perform a good deal worse than each does individually.