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Business of Buying

Merger mania

Merging of the world's major pharmaceutical companies with agricultural ties continues to a new level. In December Rhone-Poulenc Ag and Hoechst announced plans to merge. If the merger is approved, it will create the world's largest animal health and agricultural company with annual sales of $20 billion.And just one week later, Zeneca issued word that it will merge with Astra of Sweden. Combined, these two businesses will form the world's fourth largest pharmaceutical company with annual sales of $14 billion.

According to George Dahlman of Piper Jaffray Companies, animal health and chemical companies need market dominance to "recoup the investments they've made in this business because it is an expensive one." Mergers will continue as a popular way to grow quickly.

The Rhone-Poulenc and Hoechst proposal blends the pharmaceutical and agricultural groups of both companies under a new company called Aventis. Agricultural products now listed under Rhone-Poulenc and Hoechst Schering AgrEvo will be covered under Aventis. However, for the 1999 growing season, Rhone-Poulenc and AgrEvo will operate separately.

Details of the latest merger between Zeneca and Astra are sketchy. But the announcement of the proposed merger was met with approval from analysts and investors. Trading in both companies sharply increased after the announcement.Both new merger disclosures came on the heels of a collapsed deal between American Home Products and Monsanto. These two powerhouse companies proposed a merger last year but called it off in October.

Applicator training beefed up

The training program for Professional Applicator Institute (PAI) certification has been beefed up to provide more training and regulatory information for custom applicators. The expanded program should help your custom applicator provide better service.

The Agricultural Retailers Association (ARA) offers the improved PAI training. "Each year there are more regulations, technology and information that affect custom application," reports ARA's Sunny Wilkerson. "Some farmers realize it's difficult to keep up with all the information, and they look to their retailers for crop protection and fertilizer application recommendations."

The training now involves basic and more advanced sessions. Applicators who already attended a PAI session or have more than two years of experience may attend the advanced session. This session will go beyond the spraying basics and discuss subjects like site specific farming, emerging technologies and crop protection.

For more information, contact the Agricultural Retailers Association, Dept. FIN, 11701 Borman Dr., Suite 110, St. Louis, MO 63146, 800/844-4900.

10,000 refund checks issued

Refund checks recently went out to more than 10,000 midwestern farmers who purchased Roundup Ready soybeans and corn and YieldGard insect-protected corn. These purchasers faced unexpected weed flushes or crop losses or had to replant due to severe weather in 1998.

Monsanto provided the refunds as part of a risk-sharing program that it devised for farmers who use their new technology. The program refunds the technology costs of Roundup Ready and YieldGard products if a crop is destroyed. If replanting is needed, an allowance to help with replanting costs is issued. The risk-sharing program, called the Technology Value Package, is available now. New this year is a refund for 24 oz./acre of Roundup Ultra herbicide. Growers must start with an approved burn-down program, lose their YieldGard or Roundup Ready crop and replant. Contact your local Monsanto representative, call 800/768-6387.

Purchase of Dekalb nears

At press time, the Monsanto purchase of Dekalb Genetics Corporation was close to completion with the recent end to discussions between Monsanto and the Antitrust Division of the U.S. Department of Justice.

As a result of the discussions, Monsanto will grant seed company customers of Holden's Foundation Seeds the right for seven years to backcross agricultural biotechnology traits developed by third parties into Holden's lines and to sell hybrids derived from these lines.

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