Monsanto and Pharmacia Merger Ahead of Schedule

Strategic Insights -

Monsanto Co. and Pharmacia & Upjohn Inc.'s merger is proceeding at an accelerated pace, with a projected completion date of April 1, a fortnight ahead of the initially stated second quarter target. The deal still needs shareholder approval, set to be decided on March 23, and European Union clearance. To address EU antitrust concerns, the companies have agreed to divest a few minor pharmaceutical products in Scandinavia.

Key Takeaways:

  • The merger, initially slated for the second quarter of this year, is now expected to close on April 1, marking a two-week acceleration.
  • Shareholders will vote on the deal on March 23, and the European Union is expected to review the revised proposal by its revised deadline of March 30.
  • The divestiture agreement aims to address EU antitrust concerns, primarily centered around Pharmacia's analgesic product sold only in Scandinavia.
  • The combined company, Pharmacia Corp., will be headquartered in Peapack, New Jersey, with the agricultural business maintaining its operations in St. Louis, Missouri.
  • Investors have reacted positively to the revised timetable, with Monsanto's stock closing at $45 and Pharmacia's at $56, respectively reaching their highest points since the merger's announcement.

Statistics:

  • The merger is projected to close on April 1, two weeks ahead of the initial second quarter target.
  • Shareholder votes will occur on March 23.
  • The revised EU review deadline is March 30.
  • The stock prices for Monsanto and Pharmacia closed at $45 and $56, respectively, after rising by $3.88 and $3, respectively.
  • The highest point for Monsanto's stock since the merger's announcement was $45, and for Pharmacia, it was $56.

Sources:

  • "Monsanto Co. and Pharmacia Pull Ahead on Merger Deadline"
  • "FTC Antitrust That Isn't" by David Solod
  • "United States vs. Toht"