The weekend news that pharmaceutical giants Glaxo Wellcome and SmithKline Beecham are in merger talks is yet another illustration of the frantic pace of alliances and mergers in international businesses.
Such is the pressure on the management of major international companies that no sooner had talks on a possible merger between SmithKline Beecham and American Home Products ended than the British company announced it was in talks with the other British giant, Glaxo Wellcome.
A merger between the two would create the biggest pharmaceutical group in the world, knocking US company Merck into second place. It would, no doubt, allow massive cost savings - benefiting shareholders, though not employees who will lose their jobs - and lead to one of the largest research and development organisations in the world. Hardly a week now passes without news of another mega-merger or alliance, whether it be in pharmaceuticals, electronics, telecommunications or financial services: Compaq and Digital; WorldCom and MCI; UBS and SwissBank; British Airways and American Airlines. The list goes on and the only question seems to be, who's next?
For Ireland, the implications of the two latest mega-mergers would appear to be relatively straightforward. In the pharmaceuticals sector, SmithKline has a substantial operation here with plants in Dungarvan and Cork. However, Glaxo's operations are relatively small, with around 100 people in south Dublin involved in distribution and some manufacturing.
Much will depend on the strategic decisions taken by the two groups. On the face of it, there is no obvious overlap between the facilities of both companies in Ireland, although the precise implications for Ireland will only become clear if and when a merger is agreed and the two sides decide on the most profitable locations for international manufacturing. In the computer industry, Compaq and Digital work in different ends of the market and the two operations in Ireland should complement each other, rather than leading to overlaps or "rationalisation".
Some Irish businesses have, of course, developed into serious players, internationally. Just last week, Kerry Group took another big step as one of the major international food ingredient firms by purchasing part of Dalgetty. And Ireland has in turn been a target for many British retailers.
The arrival of the single currency will act as a catalyst to another batch of alliances and rationalisations across Europe. In the financial services sector, for example, it is only a matter of time before a major European bank starts to take a serious look at the Irish banking market.
And as the euro zone develops, firms will increasingly be looking at their manufacturing and distribution facilities on an EU wide basis, rather than country by country.
In this environment, the old Irish debate between developing indigenous industry and attracting multinational investment is looking increasingly outdated. Capital is ever more mobile across international boundaries.
What will matter in the single currency zone is being productive and efficient enough to remain an attractive location for business development, while growing Irish businesses which can succeed on the international stage.
