Large market share

17 January 2000

The merger of Glaxo India, Burroughs Wellcome, and SmithKline Beecham Pharma will create the second largest pharmaceutical company in India, based on the results for the year ended 31 December 1998, after Ranbaxy Laboratories, with its sales of Rs 1,382.06 crore. The new entity will have combined net sales of Rs 1,278.26 crore (not counting the sales of SmithKline Beecham Consumer Healthcare).

Glaxo Wellcome holds 51 per cent in Glaxo India and Burroughs Wellcome India, while SmithKline Beecham is a 40 per cent affiliate of the UK-based parent.

Nutritional products will stay out
SmithKline Beecham Consumer Healthcare, or SBCH, is unlikely to be a part of the merger in India. This is because the parent companies have decided to sell their worldwide nutritional business as part of their merger plan. SBCH India is a 40 per cent subsidiary of SmithKline Beecham plc. Glaxo India has already sold its consumer business, which comprised popular brands such as Complan and Glucon-D, to Heinz India.

SmithKline's consumer business in India comprises of nutrition drinks (Horlicks, and Boost, which together account for a 63 per cent share of this market); oral care products Aqua Fresh toothpaste and tooth brushes; and over-the-counter products Crocin and Eno.

Large market share
In terms of retail drug sales, the merger of Glaxo, Burroughs Wellcome and SmithKline Pharma would further widen the gap between the number one company and the rest of the top five drug companies in India. According to the IMS 1999 audit (Dec 98 to Nov 99), the merged entity will have combined annual sales of Rs 1,084.87 crore and a 7.92 per cent share of the Indian pharmaceuticals market.

Market leader Glaxo's IMS audited sales were Rs 879.36 crore, while SmithKline recorded a retail turnover of Rs 205.51 crore. SmithKline Beecham Pharma is ranked 20 in terms of retail sales.