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Biotech / Medical : Monsanto Co. -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (504)	11/11/1998 6:54:00 PM
From: Anthony Wong	Respond to of 2539

Monsanto to Raise Up to $5 Bln to Integrate Purchases (Update1) Bloomberg News November 11, 1998, 6:03 p.m. ET Monsanto to Raise Up to $5 Bln to Integrate Purchases (Update1) (Adds details of acquisitions.) St. Louis, Nov. 11 (Bloomberg) -- Monsanto Co., whose products range from arthritis drugs to weed killers, said it plans to raise as much as $5 billion to complete pending acquisitions, integrate others and introduce new drug and agricultural products. Monsanto, based in St. Louis, said it will sell about $1 billion in stock, about $2.5 billion in long-term debt and $500 million of adjustable conversion-rate equity security units. The company expects to raise an additional $1 billion from the sale of business units that don't relate to its main drug, agricultural or nutrition businesses. It also said it would cut up to 1,000 jobs. The moves follow the break-up of Monsanto's proposed merger with American Home Products Corp. Monsanto had been banking on AHP to help it integrate about $8 billion in seed and technology acquisitions. Some, including its purchase of Delta & Pine Land Co. and DeKalb Genetics Corp. have yet to be completed. ''Obviously they've decided to do this alone and we knew there'd be some concern about a drain on their resources because of acquisitions,'' said Tom Brakel, an analyst at Mehta Partners. ''Management is counting on these measures to tide them over till they launch Celebrex.'' Celebrex is an arthritis drug developed by Monsanto's Searle pharmaceutical unit that it hopes to introduce by early 1999. Analysts say the drug could be a blockbuster in the roughly $8 billion a year arthritis painkiller market. The speed with which Monsanto has put together a financing package surprised some analysts. ''I got the impression they were going to do this in 1999,'' Brakel said. Smaller Acquisitions Monsanto said it does not expect to make any more major acquisitions, though it could make some smaller ones -- of less than $20 million each -- to acquire seed companies in some areas of the world where it doesn't have as much access as it would like, said Gary Crittenden, the company's chief financial officer. Crittenden said the financing package should support the company until it brings its new products onto the market. He said the company will issue a prospectus for the public stock offering right away, and begin an investor roadshow tomorrow. ''What we have done with this is to resolve any issues related to the financing of our acquisitions,'' said Crittenden. The company said the restructuring will include cutting between 700 and 1,000 jobs, some of which will be at executive levels, to reduce its administrative costs by about 20 percent in 1999. Crittenden declined to say specifically which businesses it will sell. In general, he said they would be all those which didn't fit into its life sciences business, which it defines as agricultural biotechnology, pharmaceuticals and nutrition. Monsanto expects to take a pretax restructuring charge of $400 million to $600 million to implement its plans. It will take the charge in the fourth quarter of 1998. Monsanto recently took out a $2 billion revolving credit loan to help it complete its proposed acquisition of DeKalb Genetics Corp. Crittenden said the company hopes its new financing package means it won't have to draw on its loans. --Toni Clarke in the Chicago newsroom (312) 692-3725/gfh news.com