Monsanto in £59bn Cyanamid merger
By FWi staff
AMERICAN biotech monolith Monsanto is to merge with the owners of agrochemical giant Cyanamid in a deal worth an estimated £59 billion.
The merger, with the US-based American Home Products Corporation, will create a new company with a new name. The transaction is subject to approval by both companies shareholders but appears destined to go ahead later this year.
The two companies expect combined sales to total more than £14bn during 1998, with products ranging from household goods to genetically modified (GM) crops.
Monsanto is a life sciences company involved in applying advanced bioscience and biotechnology to agriculture and food. Its portfolio includes the development of GM crops such as RoundUp Ready soyabeans and RoundUp Ready oilseed rape.
“The new company is designed to be successful in the face of continued consolidation and increasing world-wide competition in the life sciences,” said Monsanto Chairman and CEO Robert Shapiro.
Monsanto shareholders will receive 1.15 shares in the new company for each of their existing Monsanto shares. They will own about 35% of the new company.
Although earnings per new share is expected to drop by as much as 15% in the two years following the merger, a statement from the two companies forecasts that earnings will increase soon afterwards.