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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): DECEMBER 6, 1996
MONSANTO COMPANY
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
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(STATE OF INCORPORATION)
1-2516 43-0420020
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(COMMISSION (IRS EMPLOYER
FILE NUMBER) IDENTIFICATION NUMBER)
800 NORTH LINDBERGH BOULEVARD, ST. LOUIS, MISSOURI 63167
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(314) 694-1000
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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ITEM 5. OTHER EVENTS.
On December 6, 1996, the Board of Directors of Monsanto Company
(``Monsanto'') approved a plan to spin off Monsanto's chemical businesses and
form two new separately traded, publicly held companies--a life sciences
company with $5 billion in sales that serves the agriculture, food and health
care markets, and a chemical company with $3 billion in revenues that makes and
markets an array of high-performance, chemical-based products. Robert B.
Shapiro will be chairman and chief executive officer of the life sciences
company, and Robert G. Potter, currently executive vice president, will be
chairman and chief executive officer of the chemical company.
Also, on December 6, 1996, the Board approved a reserve in the range of
$400 million to $600 million to cover after-tax costs associated with forming
two new companies. This reserve includes severance packages for job reductions,
asset and equipment write-offs, and consolidation of some manufacturing and
offices. The exact amount will be fixed at a later date.
The spin-off is subject to shareowner approval and certain governmental
approvals, including a ruling by the U.S. Internal Revenue Service that allows
the transaction to be accomplished on a tax-free basis, and is expected to
finish no later than the end of 1997.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits. See the Exhibit Index at page 3 of this Report attached
hereto and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MONSANTO COMPANY
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(Registrant)
By /s/ MICHAEL R. HOGAN
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Michael R. Hogan
Vice President and Controller
(Principal Accounting Officer)
Date: December 23, 1996
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EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table of Item
601 of Regulation S-K.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<C> <S>
1 Omitted--Inapplicable
2 Omitted--Inapplicable
4 Omitted--Inapplicable
16 Omitted--Inapplicable
17 Omitted--Inapplicable
20 Omitted--Inapplicable
23 Omitted--Inapplicable
24 Omitted--Inapplicable
27 Omitted--Inapplicable
99 Form of press release issued by Monsanto Company on December 9, 1996
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NEWS EXHIBIT 99
MONSANTO
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FOR RELEASE IMMEDIATELY PUBLIC AFFAIRS
MONSANTO COMPANY
800 N. LINDBERGH
BOULEVARD
ST. LOUIS, MISSOURI 63167
MONSANTO TO CREATE
SEPARATE LIFE SCIENCES AND
CHEMICAL COMPANIES VIA
SPIN-OFF; ANNOUNCES RESERVE
ST. LOUIS, Dec. 9, 1996--Monsanto Company's board of directors has approved
a plan to spin off the company's chemical businesses and form two new
separately traded, publicly held companies--a life sciences company with $5
billion in sales that serves the agriculture, food and health care markets, and
a chemical company with $3 billion in revenues that makes and markets an array
of high-performance, chemical-based products.
``Monsanto now houses two distinct businesses with critical differences in
their markets, products, research needs, investment needs, and plans for
growth,'' said Robert B. Shapiro, Monsanto chairman and chief executive
officer. ``After careful consideration, we're convinced these businesses must
operate separately to reach their maximum potential and thereby unlock
significant value in both.
``Investors will be able to focus on the specific growth and value
characteristics best suited to their investment philosophies,'' he added.
``Both businesses will begin their independent operations with the components
for continued success already in place: financial resources, proven management
and market-leading products.''
LIFE SCIENCES
The life sciences company is built on products that serve the needs of the
agriculture, food and health care markets. These include Roundup herbicide, the
world's best selling agricultural product for weed control; Bollgard
insect-protected cotton and Roundup Ready soybeans, the leading products in the
first wave of plant biotechnology; NutraSweet brand sweetener, used in
thousands of food and beverage products worldwide for better taste and fewer
calories; Ambien, the best-selling prescription drug for the short-term
treatment of insomnia; and Daypro and Arthrotec, two leading treatments for
arthritis. In 1995, the businesses that now comprise the life sciences company
generated approximately $700 million in operating income on sales of $5.3
billion.
The life sciences company is based upon shared scientific and technological
competencies applied to agriculture, nutrition and health.
``We're creating a new kind of company dedicated to meeting growing global
needs for nutrition and health,'' Shapiro said. ``This will be a fast-moving,
technology-driven, intensely competitive, global business that requires
continuous innovation and unprecedented speed. We've begun to establish the
culture and systems that will be required for sustained success.''
Shapiro will lead the management team for life sciences as chairman and
chief executive officer.
CHEMICALS
The chemical businesses are proven competitors that hold the first or
second position in many of their key markets. Among the individual products are
nylon and acrylic fibers, including fiber for Wear-Dated carpets and
(more)
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upholstery; Saflex plastic interlayer for automotive and architectural glass;
and phosphorus-based compounds used in specialty intermediates and personal
care, industrial and institutional products.
The chemical businesses also make and market specialty products, such as
ingredients for coatings and adhesives; polymer modifiers, process chemicals
and water treatment chemicals; and functional products, such as Therminol heat
transfer fluids, Phos-Chek fire retardants and Skydrol aviation hydraulic
fluids. In 1995, the current chemical businesses generated roughly $285 million
in operating income on sales of $2.7 billion, with 40 percent of its sales
outside the United States.
``The chemical businesses have done an outstanding job of continually
reshaping their operations to improve earnings, reduce costs, increase
productivity and provide excellent quality and service to their customers,''
Shapiro noted. ``As a new public company, they will immediately be more
streamlined and flexible and have a lower cost structure, which will improve
their already healthy cash flow. They will be effective, global competitors
with leading positions in their industry.''
The new chemical company will be led by Robert G. Potter as chairman and
chief executive officer. Potter currently serves as an executive vice president
for Monsanto and is responsible for the chemical group.
RESERVE AND NEXT STEPS
The board of directors approved the spin-off after a thorough review of
Monsanto's operations and of several options for the chemical and life sciences
businesses. The board also approved a reserve in the range of $400 million to
$600 million aftertax to cover costs associated with forming two new companies.
The reserve includes severance packages for job reductions, asset and equipment
write-offs, and consolidation of some manufacturing and offices. The exact
amount of the reserve will be fixed at a later date.
Current Monsanto employees will be selected into jobs in each of the new
companies by the end of the first quarter of 1997. Those employees not assigned
to one of the new companies will receive severance packages that offer
financial assistance, extended benefits and health coverage, training and
educational opportunities, and career counseling. Approximately 1,500 to 2,500
jobs worldwide, or 5 percent to 9 percent of the current workforce, will be
eliminated.
The spin-off is subject to shareowner approval and certain governmental
approvals, including a ruling by the U.S. Internal Revenue Service that allows
the transaction to be accomplished on a tax-free basis. If shareowners approve
the spin-off, they will then receive pro rata shares in the chemical company in
a special dividend. These shares will be in addition to those they now hold in
Monsanto.
The company will move as quickly as possible to complete the spin-off, with
the intent to finish no later than the end of 1997. Until the spin-off is
complete, the two organizations will operate separately within Monsanto,
beginning early in 1997.
It's expected that the capital structure of the chemical company will
result in an investment grade credit rating from the first day of operation.
The life sciences company is expected to maintain a strong credit rating.
St. Louis
120996
Note to editors: Roundup, Bollgard, Roundup Ready, NutraSweet, Ambien, Daypro,
Arthrotec, Wear-Dated, Saflex, Therminol, Phos-Check and Skydrol are trademarks
and service marks, owned or licensed by Monsanto Company and its subsidiaries.
