Less than a month after announcing that they were in talks aimed at forming the world's largest pharmaceuticals company, Smith-Kline Beecham PLC and Glaxo Wellcome PLC said late Monday that the discussions had ended.
The disclosure on Jan. 30 that the two British drug giants were in talks in what would be the biggest corporate deal ever stunned the industry; Monday's announcement was even more shocking to many analysts and executives who believed a combination was all but a formality. Indeed, SmithKline's chief executive, Jan Leschly, indicated just last week that he expected to make an announcement about the merger in early March.What derailed a deal, analysts said, was the same issue that had broken up merger talks between SmithKline and American Home Products in January: who would run the combined company.
While Glaxo and SmithKline had previously agreed that Leschly would be chief executive of the merged company, with Sir Richard Sykes, Glaxo's chief executive, as chairman, the Glaxo board said on Friday that it had problems with some of their agreements, including the five-person management team, according to a statement released by SmithKline Monday. Analysts said Monday the Glaxo board was balking at Leschly's becoming chief executive.