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Last Updated: Wednesday, 17 March, 2004, 16:32 GMT
Glaxo to buy Wellcome in India
An Indian researcher
Glaxo plans to consolidate its position as India's market leader
British pharmaceutical giant GlaxoSmithKline has announced plans to acquire the India division of Burroughs Wellcome in a $162m (89m) share swap.

GSK's India branch will offer 14 shares for every 10 shares in Burroughs Wellcome, company officials say.

The parent companies of GlaxoSmithKline Pharmaceuticals and Burroughs Wellcome merged nearly 10 years ago.

But labour disputes between employees of the two companies delayed the formal joining of their Indian operations.

Share buy back?

The disagreement was solved after Burroughs Wellcome workers agreed to join a retirement scheme.

"Operationally, the two had been merged for many years, but officially and legally the merger is happening now," analyst Rohit Bhatt at B and K Securities told AFP news agency.

Our first preference is to see whether there are brands available in the market which are reasonable in value, but one such option also could be a share buy back
Kal Sundaram, GSK
GSK is a market leader in India, a position it hopes to strengthen with the acquisition.

The firms' combined cash funds total more than 5bn rupees.

Managing director of GSK in India, Kal Sundaram, said the board was examining ways to utilise the money.

"Our first preference is to see whether there are brands available in the market which are reasonable in value, but one such option also could be a share buy back," he told correspondents on Wednesday.

The merger is expected to be fully completed by the end of the year but will take effect retrospectively from 1 January of this year.


SEE ALSO:
India to toughen fake drugs law
18 Dec 03  |  Health
UK drugs giant in India tie-up
23 Oct 03  |  Business


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