SmithKline spends dollars 3bn at the chemist

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The Independent Online
SMITHKLINE BEECHAM, the Anglo-American healthcare company, stole a march on its competitors yesterday when it bought Sterling Winthrop, the US non- prescription drugs business, from Kodak for just under dollars 3bn ( pounds 1.9bn).

The deal makes SKB the world's largest supplier of over-the-counter medicines - drugs that can be bought without a doctor's prescription - with combined sales of dollars 2bn last year. That market is the fastest-growing part of the pharmaceutical industry. Among Sterling's products are Panadol, the painkiller and Andrews Liver Salts.

SKB faced fierce competition from powerful contenders such as Procter & Gamble and Germany's Bayer SA. Bayer had hoped to regain North American rights to a best-selling aspirin by that name. Bayer said it would approach SKB about buying the rights.

Yesterday's acquisition is the second big deal by SKB this year. In May it entered the managed- healthcare business in the United States, buying Diversified Pharmaceutical Services for pounds 2.3bn. Earlier this month SKB failed in a bid to buy Cyanamid, the American medical products group, when its offer was trumped by the dollars 9.7bn paid by American Home Products, a pharmaceutical and medical supplies company.

The takeover of Sterling Winthrop is the latest in a series of deals that have seen the fragmented drugs market consolidate. Wall Street was pleased by yesterday's deal, particularly as it comes so soon after the appointment of Jan Leschly as the chief executive of SKB. Shares in both SKB and Kodak rose sharply in New York on the news.

Drugs giants beef up, page 13