Glaxo, SB merger talks fail

Sources said the decision not to proceed was taken on Monday night and announced immediately. It followed a desperate salvage operation over the weekend by senior executives of both companies after negotiations hit an iceberg on Friday.

While Glaxo Wellcome was remaining tight-lipped over the reasons for the failure, SmithKline roundly condemned it for reneging on agreements which itthought were in place when it decided to ditch plans for a merger with American Home Products Corp AHP on January 30.

Central to the breakdown was the allocation of jobs on the board of the combined group, which would have given Glaxo three senior positions to SmithKline8217;s two, roughly reflecting a planned 59.5 percent to 40.5 percent equity split between the two sides. quot;Glaxo has been unwilling to proceed in accordance with the agreed arrangements,quot; SmithKline said. Glaxo said it was not actively looking for another merger partner. The merger would have been the largest in corporate history, creating a company with an estimated market value of around 125 billion pounds. It would have been the second largest company in the world in market value terms.