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

To: Dan Spillane who wrote (1453)	3/3/1999 3:36:00 PM
From: Anthony Wong	Respond to of 2539

14:23 T =DuPont/Monsanto -3: Monsanto Might Not Want Chemicals Again Loomis Sayles' Goodof said that before a DuPont-Monsanto merger could happen, the two companies would have to decide what to do about DuPont's chemical operations. When Monsanto decided to focus on life sciences, one of its more visible moves was to spin off its chemical business, Solutia. But by merging with DuPont, Monsanto would once again be tying its fortunes with a chemical business. If a deal is struck, Goodof said, it could include a provision for keeping the chemical and life sciences businesses separate, perhaps through a tracking stock or a spinoff. One compelling reason for the pair to merge is the combination of their pharmaceutical businesses, Monsanto's G.D. Searle & Co. and DuPont's DuPont Pharmaceuticals. Wall Street has speculated that Searle is too small to go it alone and needs a partner to thrive. Both Monsanto and DuPont's pharmaceutical businesses are smaller and more narrow in product than other more-established pharmaceutical companies, but both have rising stars, Monsanto in the arthritis drug Celebrex and DuPont in its AIDS drug Sustiva. While a combination of Searle and DuPont Pharmaceuticals would translate into a larger business, it would still be smaller than a good portion of the competition. "You don't reach critical mass in the drug business" by combining DuPont and Monsanto, Goodof said. For Monsanto, the synergies on the pharmaceutical front would be better with a larger player, such as the collapsed deal with American Home Products. And Searle, although promising, might need more investment. Argus Research analyst James Kelleher said he suspects one reason why the deal with American Home Products fell apart was a recognition by its management that it would have to spend its money on Monsanto's projects, including Celebrex. "While it's true that Monsanto has bailed out of two expensive drugs, there's still a lot of spending to be done at Searle," Kelleher said. But despite their initial pessimism about the likelihood of a DuPont-Monsanto merger, analysts were still intrigued by the possiblity. The two comapnies share the same basic focus, life sciences, a meshing of chemistry, biotechnolgy, agriculture, and genetics. It could be argued that over the past year, DuPont and Monsanto have been the most visible players in the life sciences arena, as both positioned themselves in this emerging market. A merger would offer the companies an opportunity to draw from each other's strengths and find ways to be more efficient. For example, Goodof noted that both companies' agricultural businesses have fully staffed sales forces, which could be reduced through a combination. Edward Jones' Fiala thinks the marriage would be a good one. "In agriculture, they would really set themselves apart from the competition and they'd own the ag-biotech market for years," he said. -Desiree J. Hanford; 314-588-8443 -Gaston F. Ceron; 201-938-5166 (END) DOW JONES NEWS 03-03-99 02:23 PM

To: Dan Spillane who wrote (1453)	3/3/1999 3:37:00 PM
From: Anthony Wong	Respond to of 2539

13:59 T CNBC's FABER REPORT The following report was aired Wednesday on CNBC-TV by CNBC reporter David Faber: Now on to Monsanto. An allusion in a story today in the New York Times to talks taking place between Monsanto and Dupont has boosted Monsanto by as much as 7%. While the story focuses on Monsanto's CEO Robert Shapiro and his management style, it alludes to ongoing talks between Dupont and this life sciences company. Sources tell me that while Shapiro, a man who likes doing deals, has been talking to a number of potential acquirers of late, nothing is close to occurring here. It doesn't mean it might not, but right now, nothing. In fact, two weeks ago, people close to Dupont told me talks with Monsanto had actually cooled. I've gotten no update since then to contradict that. Shapiro is thought to want a deal, given large needs for capital and a desire of top management at Monsanto to see the value of their options return. That value was lost to the tune of as much as half a billion dollars when Monsanto's stock price collapsed after its deal to be acquired by American Home Products collapsed. Overall, shareholders have benefited from Shapiro's stewardship, which has been marked by a transformation of Monsanto into a life sciences company, as it was split from chemicals and pursued many acquisitions in the seeds area.