MORE than 1,500 North-East workers at pharmaceutical group Glaxo Wellcome will discover early in the new year the immediate effects of its merger with SmithKline Beecham.

The pharmaceutical giants are set to win the race to complete the deal to form GlaxoSmithKline soon after Christmas.

Glaxo, which is the biggest employer in Teesdale with a massive plant at Barnard Castle, revealed that it had almost passed the final hurdle - US approval. Completion of the deal is now pencilled in for December 27.

Although changes are inevitable, the Barnard Catle facility currently contributes about £800m to the annual profits of Glaxo Wellcome.

The County Durham workforce breathed a collective sigh of relief in October last year after the plant emerged unscathed when Glaxo axed 1,700 UK jobs as part of a worldwide cull of its manufacturing workforce. A merger could lead to similar such shake-ups.

A statement issued by the two companies states: "Very significant progress has been made towards completion of the merger."

The move comes a month after management at the Barnard Castle site revealed plans to cut around 50 jobs through a process of voluntary severance and early retirement.

The job losses have been forced on the company by the tough global markets and pressure on prices, and were said not to be connected in any way with the impending merger.

Glaxo and SmithKline said they had been able to reach agreement with staff who have been reviewing their merger at the Federal Trade Commission, on the terms of the planned tie-up.

The plans now need to be rubber stamped by the FTC, and although no assurance can be given that the terms will be given the final approval, it is not expected that any problems will emerge.

Dealings in GlaxoSmithKline shares are expected to start on the London Stock Exchange on the day of completion.

The completion of the merger will now come almost a year after the pair agreed to merge, in January 2000.

The Barnard Castle site manufactures antibiotics and other prescription drugs, creams, ointments and anti-sickness drugs used to combat the side-effects of chemotherapy.