Pharmacia Corp. announced that it would complete the spin off of Monsanto Co., its agricultural subsidiary, on Aug. 13, making the biotechnology, chemical and seed firm an independent company once again.
Pharmacia's board of directors said it had declared a special stock dividend of all remaining shares of common stock held by Pharmacia in Monsanto. The dividend will be distributed to Pharmacia shareholders of record at the close of business on July 29. The distribution will complete the spin off.
Monsanto officials said the long-anticipated announcement makes the fortunes of Monsanto more closely tied to those of its customers — the nation's farmers.
“We definitely see today's announcement as good news for Monsanto,” said Kerry Preete, vice president of U.S. markets for Monsanto. “They're taking the final steps to allow us to operate as a fully independent company… focused entirely on agriculture and farmers.”
The former Monsanto Co. agreed to merge with Pharmacia and Upjohn, another drug company, in 1999. In 2000, Pharmacia set up the agricultural businesses in a new company called Monsanto and then sold part of the stock of Monsanto to the public, but retained 84 percent ownership.
Late in 2001, Pharmacia announced plans to spin the remainder off to Pharmacia's shareowners so that each company could focus on its own business — pharmaceuticals or agriculture.
“I think this declaration of independence for Monsanto is good news for all of us who work at Monsanto as well as for growers,” said Preete. “It means is that we're fully invested in the future of agriculture — just like our customers. We know we're only going to be successful when farmers are successful.”
Preete said he doesn't think growers will see much of a change in their immediate relationship with Monsanto or with the products and technologies it offers.
“It's very much ‘business as usual.’ But our ‘business as usual’ is a tremendous opportunity. We have the opportunity to tailor our business and our strategy to the needs of the farmer who is our customer.”
In recent years, Monsanto has developed an “integrated solutions” approach, he said, offering farmers a complete package of seeds, biotech traits and chemistry that makes their management more efficient and improves farm productivity.
“That's a unique strategy in this industry. And, that strategy has set us apart in the past few years.”
Monsanto, Preete noted, is committed to continuing its research and investment in agriculture with such new products as YieldGard Rootworm and Bollgard II, which are in the final phases of regulatory review right now.
“It means we're developing new biotech traits, elite germplasm and continued breeding efforts, new Roundup formulations, and we're committed to new variety and hybrid development, genomics research and our Roundup Rewards program,” he said.
“It means — probably most importantly — that we've made a commitment, and we plan to stick by it. Monsanto said we've aligned our interests with those of the American farmer, and part of what I want to make sure I convey today is that today's announcement doesn't change that.”