Monsanto In #163#32bn Merger

  From the Press Association
  Monday December 20, 1999 12:02 pm

  GM food pioneer Monsanto is merging with
  another US drug company in a #163#32 billion deal.

  Monsanto, which has come under fire from
  environmentalists in Britain for its close links
  with genetically modified crops, is joining forces
  with Pharmacia & Upjohn to create the world's
  11th largest drugs group.

  The combined company, as yet unnamed, will have
  sales this year of #163#10.6 billion and 60,000
  employees.

  The deal follows the announcement in November
  which saw another US drug group, American Home
  Products, agree to take over Warner-Lambert.

  But that deal is being challenged in court by
  Pfizer, the company behind Viagra, which had
  hoped to merge with Warner Lambert.

  AHP had also held talks with Monsanto last year
  which failed to lead to a deal.

  The latest US deal is likely to spark further
  speculation that the UK's Glaxo Wellcome and
  SmithKline Beecham will renew their merger
  talks which collapsed last year.

  Merger mania in the drugs sector is being driven
  by the need to find economies of scale to help fund
  research into new products.

  Companies are also keen to keep as a wide range of
  products as possible to spread the risk involved in
  developing and marketing new drugs.

  Fred Hassan, chief executive of P&U, said:
  "Diversifying one's risk is very important in
  pharmaceuticals. This will give us the diversity
  we need."