Just got a holler from Darth Cheezer that his colleague's pager
honked with news of the sale of Monsanto for $8 billion. You just
never know where leads will come from. :^)
Anybody know more than this? Is a sale planned/announced? Is Novartis
the buyer? Last I heard was today, from Reuters--talk and analysis (I
didn't see the WSJ today):
Z U R I C H, Nov. 9 - Novartis's reported interest in life
sciences rival Monsanto faces serious anti-trust
problems given the companies' big agribusinesses,
equity analysts said today.
This could kill any deal unless the firms find
a creative way to
handle the problem, they said, but the report
fuelled talk that
Novartis is hunting for a takeover to prevent being
center stage in a fast-consolidating drugs sector.
Novartis said today it had no comment on a newspaper
report that it was interested in buying all or part
The Wall Street Journal, in an article
published today, said
Monsanto had been holding talks about a sale of all or part of
the company, and Novartis had emerged as a serious suitor.
Concern for Overlap
"Because Novartis and Monsanto have a rather big share in the
agrochemicals market, we would likely see
problems if you would combine the two agribusinesses. That is
my major concern," said Birgit Kulhoff at Lombard Odier.
She estimated they had a combined 25 percent market
Eric Bernhardt at Clariden Bank also saw cartel
Monsanto did not agree to split itself up into parts
and sell just
its G.D. Searle drugs business.
But Michael Sjoestrom at Pictet & Cie thought
reported in the Journal made sense.
A Good Fit
"Novartis obviously knows the agribusiness pretty well because
they are in it themselves, so they are a likely
acquirer of both
parts of Monsanto," he said.
Novartis already seems likely to spin off its own
agribusiness, which has been suffering amid a global downturn
in the farm sector, and could combine this with Monsanto's
agriculture division, Sjoestrom said.
"There is apparently not that much overlap
between the two
businesses. There may be anti-trust issues, namely Bt corn in
the U.S. market, maybe some issues on the research front, but
other than that I think a solution could be found."
He suggested Novartis, whose war chest has $12.93 billion
in cash, could finance a cash bid for Monsanto and pay a
premium of some 10 to 20 percent over the current
Novartis Talks About WLA-AHP
Novartis while declining comment on the report provided a
statement it had given a Swiss newspaper late last week for a
story on the impact of Warner-Lambert's agreed $69 billion
offer for American Home Products.
Pfizer has since launched a hostile $74.6 billion bid for
Asked what Novartis was looking for in a
candidate, the company said: "A strong presence in the United
States and in a quickly growing therapeutic area would be one
of a number of desirable criteria."
It said high prices for drugs companies were
when compared to what telecommunications and Internet
companies commanded, but stressed it was not under
pressure to act because it had many promising new drugs in its
Swiss analysts were less sure that Novartis
could afford to
stand idle if two big U.S. drugs groups join forces.
"Then critical mass in the United States, at
least in terms of
marketing, will get bigger. In the medium term it
the pressure (on Novartis) a bit," Sjoestrom said.
"Keep in mind
that when Sandoz and Ciba merged (in 1996 to form Novartis),
Novartis was the largest pharmaceuticals company. Now they
are number seven, so it's moving quite fast."
Pressure on Novartis
Bernhardt agreed that Novartis could not relax.
"Their product pipeline is not outstanding and
they will not
grow strongly next year, so they are under presssure to do
something," he said.
He suggested Novartis could aim for American Home
"I'm not saying it will happen, but it will be
option," he said, noting AHP also had problems with its
agribusiness, but had a good pipeline and would complement
Novartis well geographically.
Any such bid would have to be in cash, given
probable reluctance to accept relatively undervalued shares
from a foreign company, he said.
Copyright 1999 Reuters. All rights reserved. This material may
not be published, broadcast, rewritten or redistributed.
I saw nothing on AP's wire, on ABC, or CNN...and at this time of day
the Internet is so damn slow in California with all the day traders
watching the Dow move toward closing in NYC, that the pixels wheeze.
I can't get into SF Gate...and have to run out for a meeting. Anybody
got more facts?
If true, this truly makes me sad, because I have a draft message to
y'all from a couple months back predicting this. Crystal ball was
working fine at the time. What I wrote, and never sent, was:
>Tumble me in an industrial clothes dryer and call me spun-dry, but
>it would not surprise me in the least if Monsanto, as a corporation,
>ceased to exist by the middle of 2001.
Get ready for a major fight for holistic and herbal medicine; what
we've seen so far is just the first skirmishes.
Center for Integrated Ag Systems, UW-Madison
UW voice mail: 608-262-8018
Home office: 415-504-6474 (504-MISH)
Home office fax: Same as above, phone first for enabling
The Earth is not dying, it is being killed, and those who are killing it
have names and addresses. -Utah Philips
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