SmithKline Shareholders OK Merger

SmithKline Beckman Corp. said its shareholders today approved the company’s merger with Beecham Group PLC., creating the world’s second largest pharmaceuticals group.

SmithKline said the stock-swap merger took effect in the morning after regulatory filings in Pennsylvania and London.

SmithKline said the merger was approved by about 99% of the shares voted at today’s special meeting. Beecham stockholders previously approved the deal, worth about $7.7 billion. SmithKline’s stock was up 62.5 cents to $62 in early trading on the New York Stock Exchange.

The new company, SmithKline Beecham, will be a prescription and over-the-counter drug company with more than $6.7 billion of yearly revenues, second only to Merck & Co.

London Headquarters

It will be headquartered in London, with Beecham head Robert Bauman as its chief executive and SmithKline chief executive Henry Wendt as chairman.

Its stock will trade on the London Stock Exchange and the New York Stock Exchange.

Under the merger agreement reached April 12, SmithKline shareholders will receive one American Depositary Share and a $5.50 special dividend per SmithKline share. Beecham shareholders will receive 0.8784 of an ordinary SmithKline Beecham share for each of their shares.

As part of the merger, SmithKline is spinning off to shareholders its Allergan Inc. eye care unit and its 84% stake in Beckman Instruments Inc.

SmithKline agreed to the merger after being pressured by an earnings slump due to the decline of its two leading drugs, Tagamet and Dyazide.

Some analysts have said the merger could result in savings of hundreds of millions of dollars in coming years as the new company cuts administrative expenses.