Glaxo Wellcome and SmithKline Beecham agreed to merge this week, and in doing so, will create the largest pharmaceuticals company in the world, worth over £107 billion, with over 7 percent of the market share. The deal has ended years of competition and rivalry between the two companies and ends the speculation on their fate since the collapse of previous merger talks in 1988. The new company, Glaxo SmithKline, will be led by Jean-Pierre Garnier, formerly of SmithKline Beecham. Glaxo's chairman, Sir Richard Sykes, will be non-executive chairman of the new company while Jan Leschly, chief executive of SB will retire. Despite inevitable fears about job losses, the deal has largely been welcomed by the scientific community in the UK.
The new pharmaceutical giant says it will use its new size and strength in the industry to 'fund expensive developments in genetic research'. Garnier commented 'our core value will be science and innovation. We will be the kings of science and innovation.' The £250 million that Glaxo SmithKline expects to save in research and development is expected to be reinvested into the company's drug discovery projects.