When Glaxo Wellcome and SmithKline Beecham announced their proposed merger in January 1998, it was a nightmare come true for many chief executives in the pharmaceuticals industry. Two industry giants combining to form a company of gargantuan proportions could only be viewed as a substantial threat.

'It was their worst fear confirmed,' says one banker involved in the deal. 'When I used to ask chief executives what they dreaded waking up and reading in the morning newspapers, they always said: 'A merger between Glaxo and SmithKline Beecham'.'