GSK Pakistan takes over Stiefel’s local operations

Stiefel shareholders get 144.52 shares of GlaxoSmithKline (GSK) for every share.

KARACHI: GlaxoSmithKline (GSK) Pakistan has announced the merger of its assets with Stiefel Laboratories Pakistan (Private) Limited.

Operations of Stiefel Pakistan will now be transferred to GSK Pakistan. The move comes nearly a year after GSK completed the acquisition of Stiefel globally in July 2009.

The directors of the two companies said that this step will cause significant economies of scale for the new company operating as a single consolidated unit. This was revealed in a communique sent to the Karachi Stock Exchange on Friday.

The directors expect shareholders’ value to increase and that the larger asset base will result in higher growth and profitability. They added that administrative expenses will be greatly reduced as administrative policies will be uniform and simpler to implement.

The authorised share capital of Stiefel Pakistan stood cancelled as a result of the merger. Shareholders of Stiefel were issued 144.52 ordinary shares of GSK Pakistan worth Rs10 each for each share of Stiefel Pakistan.

The authorised share capital of GSK Pakistan is 500 million ordinary shares worth Rs10 each, amounting to a total of Rs5 billion.

After the merger, Stiefel, a specialist dermatology business with sales of approximately $900 million and GSK, with sales of $550 million in the prescription dermatology market, will have eight per cent of the market at the global level.

GSK acquired the total share capital of Stiefel internationally for a cash consideration of $2.9 billion and expects sales of more than $1.5 billion from its dermatology prescription products.

Published in The Express Tribune, December 4^th, 2010.