SmithKline Beecham finance director Andrew Bonfield will stay on to assist in the planned merger with GlaxoWellcome, despite being overlooked for the top job in favour of Glaxo FD John Coombe.
Bonfield appeared earlier today to mark the official unveiling of Glaxo SmithKline, and chief executive officer Jean-Pierre Garnier made special reference to him as a key player in the formation of the new company.
‘He will be a key player in the integration and we are very thankful to him for his participation,’ he said.
Critics of the deal, which is being hailed by the top brass as a ‘merger of equals’, will use the appointment of Coombe as testament to the fact that Glaxo is, in fact, a far bigger partner in the deal.
John Coombe, who will move to the newly-created post of chief financial officer, said the merger would be facilitated by the creation of a new company that will purchase the two pharmaceutical giants.
But ownership by valuation will mean that Glaxo will own amost 60% of the enlarged company.
‘The ownership is consistent with the capitalisation of the two companies,’ he said.
The plan is 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 and a quarterly dividend.
The costs of restructuring will be charged as an exceptional operating item over the next three years. Glaxo SmithKline will be listed in London and New York and PricewaterhouseCoopers, auditor for both companies, is expected to be kept on as auditor for the new company.
But today’s move by no means marks the end of consolidation within the pharmaceutical industry. Talks between Pfizer and Warner Lambert are expected to result in a merger, while Glaxo SmithKline’s very low gearing (it will have a net debt of only £2.8bn) will mean it has adequate resources to buy up the competition.
Glaxo FD Coombe bags top job at new £114bn drugs giant Glaxo SmithKline