MUMBAI, February 2: Glaxo, Burroughs Wellcome, Smithkline Pharma and Smithkline Consumer zoomed on news of merger moves on the Bombay Stock Exchange and National Stock Exchange. The four pharma stocks were among the top ten gainers in BSE's specified section. Although the British parents - Glaxo Wellcome and Smithkline Beecham - are still negotiating the merger possibilities, stocks spurted by over 15 per cent on European bourses.On the Indian bourses, Burroughs Wellcome shot up by around 10 per cent on the Bombay Stock Exchange and attracted a buyer freeze at Rs 296, which resulted in a total traded value of only 5000 shares. On the NSE, the scrip zoomed to a high of Rs 313 before closing at Rs 311 and recording a volume of 13,400 shares.Burroughs Wellcome and Smithkline Consumer stocks, even after today's rally continue to trade at an attractive price-earning ratio of 30 and 38 respectively. On a strong book value of Rs 83.2, Burroughs scrip is available at a price-book value of only3.8.Burroughs Wellcome, after Smithkline Pharmaceuticals, is the strongest company among the four with a book value of Rs 83.2 on a small equity base of Rs 9.18. Smithkline, which had announced a bonus in the ratio of 3:5 in June last year, zoomed by over Rs 34 to Rs 381.25 on BSE. The scrip witnessed huge volumes of over 38,000 shares on BSE against a daily average volume of around 5,000-8,000 shares.The biggest company among the four in terms of turnover, Glaxo attracted huge volumes of over one lakh shares. The scrip touched a high of Rs 360 on BSE and closed at Rs 359 against the previous close of Rs 334.The proposed merger of Smithkline Beecham Plc and Glaxo Welcome Plc worldwide would pave the way for the formation of the largest pharmaceutical company in India with a turnover of over Rs 1,900 crore. The new company would take the top spot from Ranbaxy, which currently has a turnover of just over Rs 1,000 crore. The new entity in India, as it's being planned worldwide, would have a total annualnet profit in excess of Rs 130 crore.The British drug giants, Smithkline Beechamplc and Glaxo Wellcome Plc are discussing a combination that would be the largest corporate merger in history and would create the world's biggest pharmaceutical company after Smithkline Beecham dropped its earlier plans to merge with American Home Products Corporation.Wordwide, as per the initial discussions, Glaxo Wellcome shareholders would hold 59.5 per cent of the stock in the new company and Smithkline shareholders would hold 40.5 per cent.India, however, could witness a three-way merger of Glaxo (after merging Wellcome), Smithkline Beecham Pharmaceuticals and Smithkline Beecham Consumer Products as Smithkline Beecham Plc has two subsidiaries in the country.
