SmithKline To Buy Block Drug Co.

SmithKline Beecham PLC is buying U.S.-based Block Drug Co. for $1.24 billion, adding brands such as Sensodyne toothpaste and Poli-Grip denture adhesive to its consumer health care portfolio that includes Aquafresh toothpaste. The deal announced Monday would secure SmithKline’s place among the world’s biggest toothpaste manufacturers behind Colgate Palmolive and Procter & Gamble.

“This acquisition will significantly enhance SB’s Consumer Health Care business, which is a key part of out strategy for corporate growth,” said SmithKline Beecham chief executive J.P. Garnier. SmithKline Beecham had $4.1 billion worth of consumer health care products sales in 1999, a third of its total revenue. Block Drug, based in Jersey City, N.J., earned $56.8 million on sales of $864.3 million in the year ended March 31.

The company has operations in over 100 countries and derives 73 percent of sales from the oral healthcare brands and 27 percent from over-the-counter medicines. SmithKline said it was too early to say what effect the takeover would have on jobs at Block Drug, which employs 3,000 people. “In any merger or takeover, jobs are lost,” said SmithKline Beecham spokeswoman Lynne Smith. “We will have a process that ensures we keep the best people … There will be an effect in both companies.”

The deal, which must gain regulatory approval in the United States and Europe, is not expected to affect SmithKline Beecham’s proposed merger with Glaxo Wellcome PLC, the statement said. That merger, which also is awaiting U.S. and British regulatory approval, is scheduled to be completed by the end of the year. SmithKline also makes the smoking cessation brand Nicorette and Nicoderm, Tums antacid and Panadol analgesic.