Pharmacia & Upjohn agrees to merge with Monsanto, creating $50 billion

Monsanto and Pharmacia & Upjohn have signed a definitivemerger-of-equals agreement to create what they call "a dynamic and powerful new competitor in the global pharmaceutical industry." It is an intriguing move as it raises questions as to what will happen to Monsanto's struggling agribusinesses, especially given the emphasis the new entity is putting on its drug operations.

In a statement, Monsanto and P&U say they will have one of the strongest sales forces in the pharmaceutical industry, notably in the USA where the new entity will have approximately 4,000 reps. It will also have an annual drugs R&D budget of more than $2 billion, estimated 1999 sales of $17 billion and a market capitalization of more than $50 billion. The new company's corporate headquarters will be located at P&U's base in Peapack, New Jersey, as will the pharmaceutical business, and annualized synergies of more than $600 million are expected.

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