The merger of two of the UK's largest companies, Celltech (Slough, England) and Chiroscience (Cambridge, England), announced in mid-June, has brought some relief to Britain's bedraggled biotechnology sector. The two companies and outside commentators alike have welcomed the bulking up of the financial resources, product pipelines, and R&D resources that this combination of companies will provide. With the joint company valued at over US$1 billion dollars, the size of the company is there for all, especially analysts and investors, to see. But investors will also be looking for cost savings in the short-term—something that the companies' managements continue to play down.
The deal was opportunistic because it turned on the imminent departure of the Chiroscience CEO John Padfield to become chief executive of the imaging division of Nycomed Amersham. Celltech and Chiroscience had been in informal discussions in the past but the obstacle of duelling chief executives had stopped the matter going any further. Once Padfield had made his decision to leave, he enjoined Chiroscience chairman Hugh Collum to approach Celltech about Celltech's acquiring the firm. It then took only three weeks to reach an outline agreement and make the matter public. "Once you get the egos out of the way, things can happen rather quickly," commented Padfield.
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