AstraZeneca and Novartis Announce Agrochemical Merger

The companies announced that Novartis Crop Protection and Seeds businesses and Zeneca Agrochemicals will be merged to create Syngenta AG. The merger brings together companies that had combined sales in 1998 of $7.9 billion. Based on these sales, Syngenta will be ranked as No. 1 in all major regions. Combined 1998 sales were $2.9 billion in NAFTA, $2.9 billion in Europe, $1.1 billion in Latin America, $0.8 billion in Asia/Pacific and $0.3 billion for the rest of the world.

Ironically, Novartis was formed via the merger of Ciba and Sandoz in early 1996. Now, the company has decided to focus primarily on its growing health care business, hence the spin off of its crop protection and seeds businesses. Coincidentally, AstraZeneca was formed via last year's merger between Astra and Zeneca Professional Products.

According to statements made by the companies, the development of Syngenta will be based on the combination of the largest global sales and service networks with the broadest and most attractive product portfolio in crop protection and a leading position in seeds. Syngenta will build on the most profitable crop segments to create and capture increased value in the agribusiness food chain through accelerated innovation to meet the needs of growers, processors and consumers.

Novartis' presence in the turf care industry is represented by products such as its herbicide Barricade, its insecticides Avid and Award, its fungicides Alamo, Banner Maxx, Subdue, Compass and Medallion, and its plant growth regulator Primo Maxx. AstraZeneca's turf industry presence is represented primarily by its line of chlorothalanil fungicides.

"The launch of Syngenta creates the first global dedicated agribusiness company, a leader in its industry that will be well positioned for profitable growth. We have an outstanding outlook based on our rich and promising pipeline and our strong technology platform," said Novartis Chairman and CEO, Dr. Daniel Vasella, in a statement released by the company.

The merger is conditional on the shareholder approvals of Novartis and AstraZeneca and receipt of relevant regulatory clearances. Completion of the merger is expected to take place in the second half of 2000.

Heinz Imhof, currently Head of Novartis Agribusiness, will become Chairman of Syngenta. Imhof said, "The creation of Syngenta marks the most exciting milestone in the history of both businesses. The combination will allow us to create a leading high performance company with an excellent competitive position providing the base for a sustainable increase in shareholder value."

Syngenta will have headquarters in Basel, Switzerland, and will be listed on the Swiss, London, New York and Stockholm Stock Exchanges. Novartis shareholders will receive 61% of the shares of Syngenta and AstraZeneca shareholders will receive 39% of the shares of Syngenta.

Michael Pragnell, presently CEO of Zeneca Agrochemicals, will be CEO of Syngenta. Pragnell said, "Zeneca Agrochemicals and Novartis’ Agribusiness are an ideal fit with complementary product portfolios and a strong international sales and marketing culture. Syngenta’s unique focus and its outstanding science base will enable it to enhance value creation in agriculture at a time of substantial industry change."