John Coombe has been confirmed as chief financial officer of Glaxo SmithKline, the £114bn drugs giant created by this week’s merger of GlaxoWellcome and SmithKline Beecham. Coombe, chairman of the FTSE-100 finance directors group, will sit on the main board of a company with a combined market capitalisation of about £114bn. SmithKline Beecham finance director Andrew Bonfield will stay on to assist in the planned merger, despite being overlooked for the top job. SKB’s chief executive Jean-Pierre Garnier, who will head the new giant, made special reference to Bonfield as a central figure in the formation of the company. ‘He will be a key player in the integration and we are very thankful to him for his participation,’ he said. The two partners expect the deal to generate £1bn in annual pre-tax cost savings from the third anniversary of completion, of which £250m is expected to be reinvested in research and development. The two parties plan to use merger accounting to complete the marriage and, in line with predictions about the future of financial reporting, the company will move to quarterly reporting and a quarterly dividend. The costs of restructuring will be charged as an exceptional operating item over the next three years. ‘We want the best of both companies to emerge in the new finance function,’ Coombe said. Both companies are audited by PricewaterhouseCoopers. ‘There is no intention not to keep PwC on,’ Coombe told Accountancy Age. The merger will create a group with combined sales of about £15bn. Glaxo will own almost 60% of the enlarged company. ‘The ownership is consistent with the capitalisation of the two companies,’ Coombe said. Glaxo SmithKline, which will be one of Europe’s largest companies, will be listed in London and New York. The deal is expected to be completed by the summer.
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