Zeneca merger threatens jobs, boosts shares

09 December 1998

Zeneca merger threatens jobs, boosts shares

By FWi staff

SHARES in Zeneca climbed this morning on expectations that the biotech company is about merge with Swedish pharmaceuticals group Astra.

But as many as 1000 British jobs could be lost if the merger goes ahead to create one of the worlds largest pharmaceuticals groups, worth about £42.4 billion.

Under the deal, Zeneca shareholders will own 53.5% of the new company.

By 10.30am today (Wednesday), Zeneca shares in London had climbed £1.15 (+4.56%) to £26.35.

Astra shares, which are traded in Swedish Krona on the Stockholm stock exchange, climbed 13% to SEK171.00.

Zenecas agro-chemical division accounts for about 30% of sales, but it “might look out of place” in the new, enlarged company, says the Financial Times.

There is also the problem of ironing out any overlap between the two individual companies.

Zeneca chief executive Sir David Barnes told BBC Radio 5 this morning that the new combined company would shed “no more than” 1000 jobs over the next three years if the deal goes through.

The new companys head office would be in London, but research and development headquarters would be in Sweden, Sir David said.

Zenecas main research establishments in the UK at Manchester and Loughborough are expected to remain open.