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.

Start your day with The Independent, sign up for daily news emails
News
Sir David Attenborough
people
Life and Style
Young girl and bowl of cereal
food + drink
News
Comic miserablist Larry David in 'Curb Your Enthusiasm'
peopleDirector of new documentary Misery Loves Comedy reveals how he got them to open up
Arts and Entertainment
Henry VIII played by Damien Lewis
tvReview: Scheming queens-in-waiting, tangled lines of succession and men of lowly birth rising to power – sound familiar?
PROMOTED VIDEO
Sport
football
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
News
i100
Arts and Entertainment
Ready to open the Baftas, rockers Kasabian are also ‘great film fans’
musicExclusive: Rockers promise an explosive opening to the evening
Life and Style
David Bowie by Duffy
fashion
Arts and Entertainment
Hell, yeah: members of the 369th Infantry arrive back in New York
booksWorld War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
advertisingVideo: The company that brought you the 'Bud' 'Weis' 'Er' frogs and 'Wasssssup' ads, has something up its sleeve for Sunday's big match
Arts and Entertainment
tv
News
i100
Environment
Dame Vivienne Westwood speaking at a fracking protest outside Parliament on Monday (AP)
environment
Life and Style
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness