GRC News Roundup: Glaxo Buys Stiefel; Governance Concerns in Hong Kong and at World Bank

Even though we posted one on Friday, let’s get caught up on some of the news from this weekend and already on Monday with another edition of the GRC News Roundup:

GlaxoSmithKline to Buy Stiefel Laboratories

It’s already proving a boom year for pharmaceutical sector deals. Now GlaxoSmithKline is joining in.

The U.K. pharmaceutical giant’s $2.9 billion deal to acquire U.S. consumer health-care company Stiefel Laboratories may be small beer compared to the $150 billion of deals agreed on by rivals Pfizer, Merck and Roche in the first quarter. But Glaxo’s decision to shun megamergers in …

>>>read entire article on GlaxoSmithKline buying Stiefel Laboratories at the Wall Street Journal. (Subscription required — click here to receive a CCI reader discount of 75% off.)

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Glaxo’s Stiefel Buy: No Blockbusters, Please

Today, Glaxo says it’s buying Stiefel. The WSJ values the deal at $2.9 billion, noting that Glaxo will also assume about $400 million in Stiefel debt and may pay the company an additional $300 million if it hits certain targets.

Everybody’s talking about the end of the blockbuster era in the drug business, and Stiefel, which dates to the 19th century, is about as far as you can get from the blockbuster era. The acquisition isn’t about some hot new technology, or a promising pipeline. It’s about boring, stable products like acne creams. “We view Stiefel as cash-generative, low growth revenue,” a team of Credit Suisse analysts writes in a note today.
>>>read entire article by Jacob Goldstein about the purchase of Stiefel by Glaxo at the WSJ’s Health Blog

Related articles:

Glaxo buying Stiefel in $3.6B deal — (Philadelphia Business Journal)

GlaxoSmithKline to buy US drugmaker Stiefel Laboratories — (Guardian.co.uk)

Glaxo buys Stiefel Laboratories for $2.9 billion — (AP)

Glaxo Buys Stiefel — (Forbes.com)

Glaxo to Acquire Stiefel Laboratories for $2.9 Billion — (NY Times)

Glaxo to Buy Stiefel for $2.9 Billion, Add Skin Drugs — (Bloomberg)

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Concerned about corporate governance in Hong Kong

Starting with the Accumulator products, to the Lehman mini-bonds, retail investor interests have been damaged as a result of lax regulatory oversight. Yesterday (April 19), there was a protest of approximately 3,000 retail investors who became Lehman victims. They sought to bring attention to their plight and to criticize the inadequate state of financial product supervision by the Chief Executive, who, in their eyes, did nothing to help them seek compensation for their losses. The victims asked the Chief Executive to step down, reflecting investors’ demand for more stringent regulations. On the other hand, banks did not perform enough due diligence before introduction of the products, another trigger event of the Lehman Mini bond incident.

>>>read entire article about corporate governance concerns in Hong Kong from Quamnet.

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Harvard Business School Outlines Corporate Misgovernance at the World Bank

This paper examines the politics of corporate governance at the world’s largest appropriations committee, the World Bank’s Board of Executive Directors, and exposes a weakness in the design of the World Bank’s decision-making structure. Any large public organization faces a challenge of representation and management. Since all decisions cannot be made by all members, founders often grant a more nimble body with decision-making powers. But representatives on the decision-making body may face a temptation to govern in the interests of their own wallet or narrow constituency rather than in the interests of the larger body.

In 2008, the Bank’s two primary component institutions—the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)—committed nearly $25 billion in loans and grants through some 300 development projects around the globe. Where did it go? By exploring the political dynamics and corporate governance of an international appropriations committee, we not only learn about international organizations but also the nature of the international system itself.

>>>read entire abstract and find downloadable PDF for Harvard’s report on corporate misgovernance at the World Bank.

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3 Trustees of A.I.G. Are Quiet, Perhaps to a Fault

In an early sign of just how tricky corporate governance has become in the era of taxpayer bailouts, three little-known trustees with no office, no staff and almost no mission will soon be deciding questions that affect the fate of American International Group, the giant insurance company.

The trustees include a retired Wall Street executive, the head of a Texas pipeline company and the chairwoman of a firm in Bermuda that provides administrative services to hedge funds.

Even though the government has bailed out A.I.G. with $170 billion in federal money, and even though the Treasury owns nearly 80 percent of its shares, the voting power is in the hands of the three trustees.

>>>read the entire article at the New York Times

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Tags: AIG, corporate governance, GlaxoSmithKline, Harvard, World Bank