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To: Steven Messina,L.M.T. who wrote (23914)	12/8/1998 1:39:00 PM
From: JeffA	Read Replies (1) \| Respond to of 119973

ZEN news from biocognizance.com Zeneca Group Plc Dow Jones Newswires -- December 8, 1998 Zeneca, Astra AB Close To Merger Worth More Than $30B By Steve Lipin NEW YORK (Dow Jones)--Zeneca Group PLC (ZEN) a mid-sized U.K. drugmaker, and Swedish pharmaceutical concern Astra AB are close to a merger pact valued at more than $30 billion in what would be one of the largest deals in European history, according to industry executives familiar with the talks. The transaction, if completed, would the latest in a spate of pharmaceutical mergers in Europe. Though no deal is yet completed, a transaction could be announced within days, possibly by tomorrow these people say. Terms couldn't be determined, and the talks could still collapse at the 11th hour. Astra has a stock-market value of slightly more than $30 billion, while Zeneca has a market value of about $38 billion. The combination would create a survivor in the quickly consolidating industry. Based on 1997 pharmaceutical sales, the combined company would have about $8.3 billion in sales, making it one of the biggest in the world. Astra's Class A ADRs changed hands at $18.75, up 50 cents, while Zeneca's ADRs changed hands at $42 a share, up $1.25 a share. Talks between the two sides, which have been rumored for months, come amid a flurry of intra-European mergers within the drug industry. Germany's Hoechst AG (HOE) and France's Rhone-Poulenc SA (RP) have agreed to a cross-border merger of their pharmaceutical and agrochemical operations, and in France, Sanofi SA (F.SAN) and Synthelabo SA (F.SYN) announced a merger valued at more than $10 billion. The increasing pace of pharmaceutical mergers in Europe stems from their increasing difficulty in competing against the giants such as Novartis AG, a combination of the megamerger of Ciba-Geigy AG and Sandoz AG, two Swiss pharmaceutical giants, Glaxo Wellcome PLC, and U.S. giants such as Pfizer Inc., Merck & Co. and Bristol-Myers Squibb. Many of the U.S. players are also significantly larger than many middle-tier European companies. By combining, Astra and Zeneca would effectively create a new giant. The smaller players are struggling to squeeze more profits and sales out of sluggish European markets at a time when deep pockets are needed to both conduct genetic research and market new potential blockbusters. Astra has been viewed as a candidate for a merger or acquisition for some time. But the restructuring of its longstanding U.S joint-venture with Merck & Co. earlier this year was viewed as removing one of the last big obstacles to a deal. Astra Merck Inc., based in Wayne, PA, is jointly owned by the two companies, but the restructuring gave Astra a way to unwind the relationship through payments to Merck. The joint-venture has been a huge windfall for Merck and a sore point for Astra. One of its drugs, Prisolec, which treats ulcers and heartburn, became a blockbuster, though Astra had to share the proceeds with deep-pocketed Merck. Astra's Prisolec is the world's best selling prescription drug. This could be the second or third biggest deal ever in Europe. The largest European deal to date is British Petroleum PLC's $50 billion pact to acquire Amoco. Zeneca was spun off from Imperial Chemical Industries in 1993. Besides traditional pharmaceuticals, the company has a big agrochemical business. Zeneca recently said it would dispose of its specialty chemicals business.