Shares in pharmaceuticals giants SmithKline Beecham and Glaxo Wellcome soared today after the companies confirmed they were in talks which could lead to a merger.
The companies were prompted into making a statement to the stock market after reports suggested that the two had restarted talks which could lead to the creation of the worlds largest drugs group.
The two groups last held talks over a merger two years ago but discussion collapsed amid disagreement over management roles in a merged group.
Shares in SmithKline Beecham leaped more than 12% after the talks were confirmed rising 100p to 891p, while Glaxo Wellcome saw its shares gain 150p to £18.90.
Rival pharmaceutical company AstraZeneca was also cheered by the news, with its shares adding 51p to £25.40.
The rises helped push the FTSE-100 Index of leading London shares up by 91.2 points to 6622.7 shortly before 9am.
Elsewhere in the retail world, supermarket giant Sainsbury’s brought some hope to its investors by hiring the chief executive of insurance company Prudential, Sir Peter Davis, to help turn around its struggling retail business.
News of the arrival of Sir Peter, who replaces Dino Adriano from March 1, came as the group warned its profits for the year would be at the low end of market expectations.
Shares in Sainsbury’s were up 20.5p to 325p while Prudential lost 17p to £10.60.
Smaller supermarket group William Morrison also jumped by 3.5p to 148p after unveiling record-breaking sales figures covering the Christmas-New Year period.
PA News 14/01/2000
