Monsanto Splits

Pharmacia &Upjohn are interested only in Monsanto’s profitable pharmacuetical business. If the merger goes ahead the ailing agricultural biotech sector of Monsanto will be separated from the new company which will be called Pharmacia corporation, 20% will be sold off and the remaining 80% will retain the tarnished name Monsanto.

The news comes as little surprise to those following the recent fortunes of the biotech giant. On November 1st The Washington Post reported that “Monsanto stock has lost more than a third of its value in the last 14 months, and analysts believe that unless there’s a sharp upturn in the stock price soon, company executives could be forced into radical changes, possibly including breaking Monsanto into pieces”

Monsanto have built up debts of over $8 billion by buying seed companies in order to push their gene-tampered crops. This stratagy has failed due to worldwide resistance to GE crops. Monsanto are now desperate to hitch up with a corporate backer and have been involved in talks with major players in the biotech industry including DuPont, Novartis and Dow since their proposed merger with American Home Products fell through.

The move is part of a recent trend of pharmacuetical corporations distancing themselves from unwanted and thereby unprofitable GE crops. The two industries are both heavily investing in genetic engineering and have become closely integrated. Research in GE crops and medicines overlap therefore corporations can make cost savings by integrating the two. However, the pharmacuetical industry has so far escaped the GE backlash and the companies don’t want their products tarred by association with agricultural biotechnology.

Novartis and Astra-Zeneca, two of the world’s biggest biotech companies announced last month that they intend to split off their agro-chemical and biotech seed divisions and merge them together to form a new company, Syngenta.

SOURCES
“Monsanto, Pharmacia & Upjohn agree to merge” Emily Kaiser, Reuters, December 19, 1999
http://www.biotech-info.net/monsanto_pharmacia.html