GlaxoSmithKline snares Block

SmithKline's strength lies in over-the-counter drugs

UK pharmaceutical giant GlaxoSmithKline (GSK) has received EU clearance for its $1.24bn (£840m) take-over of Block Drug, makers of Sensodyne toothpaste.

The deal will make the British drugs giant, which was formed in 2000 by the merger of Glaxo Wellcome and SmithKline Beecham, the second largest manufacturer of toothpaste in the world.

GSK Chief executive Jean-Pierre Garnier has said the acquisition underlines the company's commitment to its consumer health division following the merger.

But some analysts believe that the company, which owns the Mcleans and Aquafresh brands, may simply be strengthening its oral care unit prior to spinning it off.

Market reacts

Although Block's activities overlap with GSK in some oral health care markets, the European Commision concluded that they would face sufficient competition.

GSK sees its toothpaste market share increase in all EU member states as well as in Norway as result of the merger, but not to the point of a dominance, the commission said.

The acquisition did not impress investors, however, with GlaxoSmithKline shares off 13 points at 1,785 on Friday.

Block Drug makes denture care products, oral health care products, consumer over-the-counter medicines, health and beauty aids and professional dental products.

Clearance for the deal has already been received in the US, Australia and Canada, it added.

The companies expect to close the transaction early next week.

Completion of the Glaxo SmithKline merger was delayed until the end of last year because of regulatory concerns.

The US Federal Trade Commission has requested more information from the two groups about products which help people to stop smoking.