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Monsanto, Novartis talk?
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November 9, 1999: 2:44 p.m. ET
Report: drug giants discuss merger, but hurdles remain
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LONDON (CNNfn) - Monsanto and Switzerland's Novartis are in talks that could lead to a full-blown merger of the two pharmaceutical and crop-protection companies, according to a press report Tuesday.
The firms are unlikely to reach an agreement in the near future, the Wall Street Journal reported, citing several hurdles to a deal.
The newspaper reported that Monsanto's senior executives would rather merge the company than break it into several parts, as shareholders have advocated. The $74 billion battle between Pfizer (PFE) and American Home Products (AHP) for control of Warner-Lambert (WLA) has highlighted the trend toward consolidation in the pharmaceutical sector.
The Journal reported that St. Louis-based Monsanto (MTC) has also held discussions with industry rivals such as Schering Plough (SGP), DuPont (DD) and Pfizer, although Novartis is seen as the preferred buyer because it is one of the few companies likely to want both Monsanto's pharmaceutical and agricultural businesses. Swiss-based Novartis is already a major player in both fields.
Monsanto is also considering splitting its pharmaceutical and crop protection units, according to the Journal.
The newspaper noted several hurdles to a potential Monsanto/Novartis deal, including financing issues, potential antitrust issues and a recent rebound in Monsanto's stock price.
Neither company would comment on the reported talks.
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Monsanto
Novartis
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