Drugs giants merger fees may hit £30m

Slaughter and May and Linklaters & Alliance could earn an estimated £30m in fees from the merger of drugs giants SmithKline Beecham and Glaxo Wellcome.

The £114bn merger is one of the world's largest. SmithKline Beecham and Glaxo Wellcome are long-term clients of Linklaters and Slaughters respectively.

Slaughters' seven-strong team is led by corporate partners Robert Stern and Michael Pescod. The other partners on the team are Malcolm Nicholson (competition), Howard Now-lan (tax), Eddie Codrington (share schemes) and Howard Jacobs (employment).

The Linklaters team is led by corporate finance partner Stephen Boughton. The other partners working on the deal are Lucy Fergusson (corporate finance), Charles Allen Jones (corporate and relationship), Gavin Robert (antitrust), Janet Cooper (share scheme) and Mike Hardwick (tax).

Brussels-based antitrust partner Alec Burnside is also working on the deal.

While neither firm would comment on the fees, City sources confirm that they will be very high.

It is believed that the investment banks will take the lion's share of the £200m fees. But the law firms are expected to take home several million pounds in income following the deal.

One senior City financier says the fees could reach up to £15m on each side but adds this would depend on a variety of factors.

Commenting on the fees involved one leading practitioner says: “It does not surprise me at all on a deal of this size and hideous complexity.”

Both firms will also have to wait to see if the merged company's new head of legal, yet to be announced, will retain both firms or only one.

US firm Shearman & Sterling is also working for SmithKline Beecham.