SmithKline Beecham to quit UK

Anglo-American drugs giant plans to move corporate base to Chicago

The Anglo-American drugs giant SmithKline Beecham is planning to shift its corporate base from the UK to the US in a bid to simplify its management structure and cut costs, company insiders say.

The move would mean the closure of its UK head office in Brentford, west London, with the loss of up to 500 jobs, while further job cuts could ensue as back-office functions are transferred to the US.

The company was formed by the merger of SmithKline, the American pharmaceuticals business, with Beecham, the English drugs and consumer products company, in 1989. The group numbers among its bestsellers Tagamet, the anti-ulcer preparation, while Famvir, its anti-herpes treatment, has made strong progress since it was launched two years ago.

It also has a variety of consumer products, including Macleans toothpaste, Ribena, Lucozade and Horlicks, which form the residue of the old Beecham business.

Jan Leschly, who took over as chief executive in 1994 from Robert Bauman, once Britain's highest-paid executive of an FT-SE 100 index stock, is understood to spend relatively little time in the UK.

A company spokesman officially denied suggestions of a move. "There are no such plans," he said. Mr Leschly, he added, spent his time in all the regions where SB has operations, in proportion to revenues, and that the total for the UK was at least "one to two weeks a month."

But there is no doubt that, since the merger - which was touted at the time as a marriage of equals - the American side has dominated the business. The company has already made major cuts in the UK, the largest being the closure of the St Helens factory on Merseyside in 1994, with the loss of 480 jobs.

Sources inside SB say Mr Leschly dislikes commuting to London and has always preferred the group's US industry headquarters in Chicago.

One well-placed source confirmed that SB had been making plans to move and reincorporate in the US, though no final decision had yet been reached.

There would be compelling reasons for such a move which would benefit the business. Cost savings, after any initial restructuring provisions, would be substantial, while there would also be tax benefits.

A move to the US would also affirm the profoundly American nature of the company, while positioning it better for the continuing consolidation in the international health-care industry.

In what may be a veiled warning in the latest annual report and accounts, the company highlights its concerns over the Greenbury Committee proposals on executive remuneration. Chairman Sir Peter Walters said: "Such changes should not be so restrictive that they impede major global companies based in the UK from competing for the best management talent. The company is continuing its discussions with the Stock Exchange to ensure that full consideration is given to the international context in which we operate."

Last year, out of sales of pounds 7bn, pounds 3.3bn were in the US while only pounds 560m were in the UK - although there were sales of pounds 1.7bn to continental Europe.

The company employs more than 50,000 staff worldwide, the majority of them US-based.

In April, the company simplified its share structure, which took the form of equity units made up of A shares and B shares. The separate classes were replaced with a single class of ordinary share, with a cash payment to equity unit holders of $295m.

Arts and Entertainment
On set of the Secret Cinema's Back to the Future event
filmBut why were Back to the Future screenings cancelled?
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Lewis Hamilton walks back to the pit lane with his Mercedes burning in the background
Formula 1
Arts and Entertainment
The new characters were announced yesterday at San Diego Comic Con
comic-con 2014
Arsenal supporters gather for a recent ‘fan party’ in New Jersey
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
No Devotion's Geoff Rickly and Stuart Richardson
musicReview: No Devotion, O2 Academy Islington, London
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Life and Style
Balmain's autumn/winter 2014 campaign, shot by Mario Sorrenti and featuring Binx Walton, Cara Delevingne, Jourdan Dunn, Ysaunny Brito, Issa Lish and Kayla Scott
fashionHow Olivier Rousteing is revitalising the house of Balmain
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

The BBC’s wolf in sheep’s clothing

What will Evan Davis be like on Newsnight?
Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

Inside a church for Born Again Christians

As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
Rihanna, Kim Kardashian and me: How Olivier Rousteing is revitalising the house of Balmain

Olivier Rousteing is revitalising the house of Balmain

Parisian couturier Pierre Balmain made his name dressing the mid-century jet set. Today, Olivier Rousteing – heir to the house Pierre built – is celebrating their 21st-century equivalents. The result? Nothing short of Balmania
Cancer, cardiac arrest, HIV and homelessness - and he's only 39

Incredible survival story of David Tovey

Tovey went from cooking for the Queen to rifling through bins for his supper. His is a startling story of endurance against the odds – and of a social safety net failing at every turn
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride