SmithKline merger on track as lawyers plan to ring-fence AHP liabilitie s
Monday 26 January 1998
If the merger does go ahead it is likely spark a radical shake-up of both groups which could involve a multi-billion pound disposal programme.
SmithKline and AHP's lawyers are working on a plan to ring-fence potential legal liabilities arising from problems with some of the US group's products.
One option is to follow the example of T&N, once the largest asbestos manufacturer in the UK, which capped liabilities by taking out an insurance policy. Another plan under consideration is setting up a separate company which would be liable to pay any claims. The newly merged group would then be freed of any future liabilities.
Despite the legal complexities, the two sides are confident that they can reach a solution. "They would not have gone ahead with the merger talks and gone public if they thought that the potential problems were insurmountable," said one source.
AHP has recently been forced to withdraw from sale two leading dieting drugs, Redux and Pondimim, which were commonly used in the now discredited diet cocktail known as Fen-Phen. Research demonstrated that they could cause potentially fatal complications. It also faces legal action over Norplant, a contraceptive device that is alleged to have negative side- effects, including personality changes. Analysts estimate that legal claims could rise to several billions of dollars.
If a merger does go through AHP's agrochemical arm, which includes herbicides, pesticides and fertiliser businesses, is likely to be sold off soon after the deal is completed, according to sources close to the talks. The business does not sit easily with the huge prescription drugs and healthcare business that SmithKline and AHP seek to create.
- 1 Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
- 2 Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
- 3 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 4 The Unluckiest People of the Year 2014 (and one very unlucky giraffe)
- 5 Magna Carta will be 800 years old next year – the perfect reminder of the rights and freedoms we must hold dear
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
UK weather: Warning for more snow and ice as freezing temperatures and gales hit Britain
Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
UK weather: Travel chaos continues as King's Cross train delays add to snow on roads
The Unluckiest People of the Year 2014 (and one very unlucky giraffe)
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Immigrants make UK racist, says Ukip councillor Trevor Shonk
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...