New, Independent Monsanto Emerges
Monsanto once again became an independent company when Pharmacia shed its 84% interest in the firm last week. At the close of trading on Aug. 13, Pharmacia issued its shareholders 0.170593 shares of Monsanto stock for each Pharmacia share.
Hendrik A. Verfaillie, Monsanto's president and CEO, said the spin-off "marks an important milestone, affirming Monsanto's place as a company solely dedicated to agriculture" through an integrated strategy that combines seeds, biotechnology, and agrochemicals.
Monsanto was established in 1901 and grew to become a leading diversified chemical company. It launched Roundup, its flagship herbicide product that still garners billions in annual sales, in 1974.
In 1985, Monsanto purchased the drug firm G. D. Searle. Soon after, it began divesting chemical businesses and then embarked on a biotech and seed company acquisition spree. Its life sciences focus was cemented with the spin-off of its chemical operations as Solutia in 1997.
Pharmacia bought Monsanto in March 2000 to get the Searle business. Just seven months later, it sold 16% of Monsanto through a stock offering. Although the full spin-off was always planned, Pharmacia completed it sooner than expected as a condition of being acquired by Pfizer (C&EN, July 22, page 9).
Analysts anticipated that Pharmacia shareholders, more interested in owning the drug company's stock, would quickly sell their new Monsanto shares. Although trading volumes were high, Monsanto's stock did much better than expected, rising 7.6% to $17.01 per share on Aug. 14.