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Tuesday, May 4, 1999 Published at 08:59 GMT 09:59 UK

Business: The Company File

Durex may be good for Scholl

Durex condoms is a sought after brand

Durex maker London International Group (LIG) is in merger talks with footcare and general health group Seton Scholl.

LIG is the world's largest producer of condoms, with a 21% share of the worldwide branded market and also makes rubber gloves best known under the Marigold label.

Together with Seton Scholl, whose products range from incontinence pads and corn plasters to lice treatments, the two would together create a 1.4bn global healthcare group.

Cost savings

The firms confirmed they are holding talks on a possible share-exchange merger following Sunday newspaper reports that they are in the final stages of talks.

As of Friday's close in London, Cheshire based Seton Scholl had a market capitalisation of around 810m, while LIG was valued at 625m.

"The discussions between Seton Scholl and LIG have indicated that the combination of the two businesses could offer significant potential for operational synergy benefits by eliminating duplicated distribution, production and central functions," the companies said.

Today's announcement comes only a year after the merger of healthcare group Seton and footcare group Scholl to create a leading healthcare provider.

According to the newspaper report, Seton Scholl chairman Stuart Wallis will chair the merged group, with chief executive Iain Cater also keeping his current position.

Profits drooped

LIG chief executive Nick Hodges would become non-executive deputy chairman, the report said.

Seton said any merger would take place through a share for share exchange.

There was a positive response for Seton Scholl shares in London as they raced up 64.5p to 831.5p within minutes of the market opening.

Although the talks have been confirmed, some analysts believe there may still be a counter bid for LIG.

The condom and surgical gloves maker became a target for suitors after a profit warning at the end of last year saw 30% knocked off its share price.

In January it revealed it had received an unsolicited approach after the warning, which followed from an unexpected drop in demand for its medical examination gloves.

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