The much-awaited merger of Burroughs Wellcome India Ltd with GlaxoSmithKline Pharmaceuticals Ltd in the country was approved by boards of both entities on Wednesday with a swap ratio of 14:10 shares.

"We were looking forward to this merger in India for a long time wherein BWIL shareholders will get 14 GSK shares for every 10 shares of BWIL (of Rs 10 each)," managing director of both entities, S Kalyanasundaram, told newspersons in Mumbai.

"While operational integration had taken place some years ago, legal entity integration will help to reduce complexity in our operations and promote corporate governance," he said.

Ruling out any rationalisation and change in business strategy, he said the merger is subject to the approval of shareholders of the two companies and of the Mumbai High Court.

GSK senior executive director Mehernosh B Kapadia said: "The whole process is expected to be completed by end of this year, and the merger, when approved, will be effective retrospectively from January 1, 2004."

Kalyanasundaram said BWIL has no employees and after GSK's Worli property was sold; they would also dispose off the Mulund plant of BWIL. GSK Plc's stake in the merged entity would be 49.2 per cent.

The constitution of the board was also expected to remain the same for the time being, he said.

Ernst and Young Pvt Ltd and Deloitte Haskins & Sells worked out the swap ratio with due consideration to various methodologies such as market price, net assets value and discounted cash flows, he added.