Green Cross To Disappear, Merged Into Yoshitomi

Troubled Japanese blood products maker Green Cross sees an end to itsdifficulties by merging into fellow Japanese drugmaker Yoshitomi Pharmaceutical Industries, in a deal scheduled for completion October 1 and involving a share exchange - five shares of Green Cross for every three of Yoshitomi. The Green Cross name will disappear, though the group's current president will be named a vice president of Yoshitomi, with Yoshitomi's president remaining as president of the new group.

Major mergers and takeovers in the Japanese pharmaceutical industry are relatively rare, and this one is thought to have been encouraged by Japan's Ministry of Health and Welfare. It will create a combined company capitalized at 21.4 billion yen ($175 million) and with sales estimated at around $150 billion a year. News of the merger move pushed Green Cross' share price up 72 points, while that of Yoshitomi moved down 10 points (see also pages 8-9).

Green Cross' problems stem from sales, in the 1980s, of blood products contaminated with HIV for use in hemophiliacs, which resulted in various lawsuits from the hemophiliacs and their families (Marketletters passim). Green Cross agreed to pay victims 25 billion yen in compensation.