AHP Takes On Remainder Of Genetics Institute

American Home Products has decided to exercise its option to purchase the outstanding shares in Genetics Institute which it does not already own.

AHP acquired its initial 60% stake in GI in 1992, and was granted an option to acquire the remaining equity. The price AHP is to pay is $85 per share, plus amounts to be paid in respect of outstanding options, which amounts to a net total of $1 billion. Of this total, $700 million will be written off as purchased R&D, and the remaining $300 million will be recorded as goodwill.

GI will become a separate subsidiary of AHP and will report to Fred Hassan, executive vice president in charge of its worldwide pharmaceutical and medical device operations. Gabriel Schmergel, president and chief executive of GI, will retire in January 1997 and will take up a consultancy position with the firm. Patrick Gage, currently chief operating officer of GI, will succeed Mr Schmergel as president.