Outlook: Nice, but what's in it for shareholders?
Thursday 10 December 1998
Furthermore, both companies face a severe patent expiry problem early in the next century. Perhaps as much as 60 per cent of present sales are affected. Obviously there are replacement products coming through to help fill the hole, but it almost certainly wishful thinking to believe, as Sir David Barnes seems to, that AstraZeneca will soon be challenging Glaxo Wellcome in product development and market reach.
Hakan Mogren, the portly former chocolate factory manager who runs Astra, gets his long sought after passport out of Stockholm (oh how the Swedes do like London) while Percy Barnevik is delivered another management challenge to get his teeth into. And the deal partially solves the problem of management succession at Zeneca. But what's in it for shareholders?
Individually, both companies are just about bite-for the goliaths, but together they are too big to swallow. It can readily be seen that if the merger fails to deliver the promised new force in global pharmaceuticals, it will destroy shareholder value, not create it. Both share prices rose strongly yesterday, but this was less of a thumbs up for the merger as a recognition of the opportunity it creates for others to swoop. We can probably safely rule out Glaxo Wellcome. Much as it would like to take out Zeneca, the scale of the job cuts it would have to push through to make the takeover pay would make it politically unacceptable. But a company such as Roche might be interested in either Zeneca or Astra. Nor would other foreign players have any such qualms over British job losses.
With so many other big mergers in the regulatory mangle, including two other giant pharmaceutical get togethers, this deal could take as long as nine months to clear. That allows plenty of time for rival proposals to come forward.
- 2 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 3 University student in court for allegedly covering housemates' food in window cleaner and spit
- 4 Ryan Gosling posts tribute to 'Ryan Gosling Won't Eat His Cereal' creator Ryan McHenry
Italian police 'reveal' what Jesus looked like as a young boy
Mysterious 'X-Files' sounds heard miles above the Earth
Garland shooting: Isis claims attack on Prophet Mohamed cartoon contest in Texas as its first action on US soil
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
General Election 2015: Photographic history of Bullingdon Club tracked down - including new picture of David Cameron in his finery
In defence of liberal democracy
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...