Unions have expressed fears that 15,000 out of 105,000 jobs will go worldwide following the planned merger of Glaxo Wellcome and SmithKline Beecham.
The pharmaceutical giants would seek up to £1bn of cost savings and top management posts would be switched to the US if the merger goes ahead.
The Manufacturing, Science and Finance union has called on the European Commission to look at the job implications of a merger. Union representatives will meet the companies’ chief executives and industry minister Lord Sainsbury on 26 February. The MSF fears that either Glaxo Wellcome’s Stevenage research and development centre or SmithKline Beecham’s Harlow facility will close.
Glaxo SmithKline, as the giant will be called, will remain a UK company, with operational headquarters at a new US site. The US would account for 45% of its sales, Europe for 33%, and the rest of the world for 22%.
Up to £750m of savings could come from eliminating overlaps in administration, sales, marketing and manufacturing. Cutting R&D overlaps could save £250m. Both companies have rationalisation programmes which are expected to save £570m a year.
The combined firm would be the world’s largest pharmaceutical company and the UK’s biggest company, with a market capitalisation of £114bn.
Glaxo Wellcome’s shares fell 151p to 1667p on news of the possible merger before rising to 1688p. SmithKline Beecham’s slid 103p to 744p, then recovered to 759p. The dip was due to disappointment at lower-than-expected cost savings, analysts said.