Boise, Idaho
December 2, 1999Early this morning, Novartis
announced its intention to spin-off and merge Novartis Seeds and Crop Protection with the
Agrochemicals business of AstraZeneca, creating
the world’s first dedicated agribusiness company. The new company will be named Syngenta
AG, headquartered in Basel, Switzerland, and listed on the Swiss, London, New
York and Stockholm Stock Exchanges. According to Novartis Chairman and CEO, Dr. Daniel
Vasella, the spin-off and merger decision was made as part of Novartis’ strategy to
focus on its Healthcare business portfolio. Neither the Advanta Seeds business of
AstraZeneca nor the Animal Health business of Novartis will be part of the spin-off and
merger.
Heinz Imhof, Head of Novartis Agribusiness worldwide, will serve as Chairman of
Syngenta, and Michael Pragnell, CEO of AstraZeneca Agrochemicals, will become CEO. Chief
Operating Officers will be Jeff Beard for the Seeds sector, and John Atkin for Crop
Protection. In the U.S., Ed Shonsey continues as President and CEO
of the Field Crops organization, and John Sorenson will continue as President of the
Vegetables and Flower Seed organizations. The Vegetables organization of Novartis Seeds
develops, produces and sells vegetable seed in the U.S., Canada, Mexico and Central
America, under the ROGERS® and AMERICAN SUNMELON® brands.
"For Novartis Seeds, and especially Vegetables," stated
Sorenson, " we do not anticipate fundamental structural or strategic changes related
to the merger. Integration of the various businesses of Syngenta will occur primarily in
our Crop Protection units where synergy opportunities are greatest, but no integration
between the Seeds and Crop Protection organizations is planned. We anticipate minimal
impact on Novartis Seeds employees, due to the absence of overlapping seed
businesses."
Based on 1998 sales of $7.9 billion for the combining parties, Syngenta will enjoy the
number one position in Crop Protection in the world, and the number
three position in Seeds. The merger will give Syngenta an unparalleled global
marketing capability across crops and regions, and an outstanding R&D platform to lead
innovation.
AstraZeneca was selected as a partner of choice because of its strong brands and
excellent research and marketing skill set. With a combined 1998 R&D investment of
approximately $700 million, Syngenta will have a strong innovation platform in chemistry
and plant biotechnology with the leading team of scientists in the industry and the
potential to exploit new economies of scale. These innovative capabilities will include
dynamic programs in invention, synthesis, screening, breeding, gene technology and
genomics.
Tomorrow’s products will increasingly be
centered on crop input and output traits as well as advanced crop protection chemicals.
Syngenta’s discovery activities will contribute to the development of high-value
products that will enhance the production of safe, healthy and high quality foods, feed,
plants and plant derivatives. Major international research centers are in Berkshire UK,
Leiden NL, Richmond and La Jolla in California, Research Triangle Park in North Carolina,
and Basel and Stein in Switzerland.
Heinz Imhof, Chairman designate of Syngenta, commented, "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."
The development of the new company 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.
Completion of the merger and the listings of Syngenta stock are expected to take place
in the second half of 2000. Novartis and AstraZeneca have entered into a binding agreement
to create Syngenta, but the transaction is conditional on shareholder approvals for
Novartis and AstraZeneca and receipt of relevant regulatory clearances. In the meantime,
the companies will continue to operate under their current names as separate, competitive
businesses.
Novartis shareholders will receive 61% of the shares of Syngenta and AstraZeneca
shareholders will receive 39% of the shares of Syngenta. The combination is expected to be
purchase accounted as an acquistion of Zeneca Agrochemicals by Novartis Agribusiness.
