Filed by Monsanto Company
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Monsanto Company
Commission File No. 001-02516
PHARMACIA CORPORATION
MERGER PROXY
QUESTION AND ANSWER DOCUMENT
NOT FOR DISTRIBUTION
TO BE USED ONLY IN RESPONSE TO QUESTIONS
EXTERNAL Q&A
TRANSACTION-RELATED QUESTIONS
Q1 WHY IS THIS GOOD FOR PHARMACIA & UPJOHN AND MONSANTO? WHY ARE THEY BETTER
TOGETHER THAN AS STAND-ALONE COMPANIES, OR WITH OTHER POSSIBLE PARTNERS?
A1 We believe that the combination of the two would create a company that
could operate even more successfully in today's competitive environment,
take fuller advantage of its opportunities, do it faster than either could
separately, and deliver increased value. In short, this is a merger to
create growth and capture the opportunities available in today's
competitive environment.
Q2 WHAT STRENGTHS DO EACH COMPANY BRING TO THE TABLE THAT ENHANCES THE VALUE
OF THE COMBINED ORGANIZATION?
A2 Both companies are committed to innovative science, to developing and
marketing great products and to a philosophy of growth and leadership.
Both have been successful and have built a solid set of core businesses
that have created significant growth and funded research and other growth
investments. And each brings experience, world-class management teams,
innovative marketing organizations and great products to the new company.
Together, we're committed to bringing our science and technology to global
markets more rapidly in major new products that provide excellent value
and long-term growth.
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Q3 WHAT WILL THE NEW COMPANY BE CALLED?
A3 "Pharmacia Corporation" has been selected as the name of the new company
created by the merger of Monsanto and Pharmacia & Upjohn. Pharmacia
Corporation captures the focus of the new organization as a fast-growing
core pharmaceuticals business in the top-tier of the industry. We have
chosen a name with power and global relevance. This name will create a
strong new identity for our 60,000 employees and will build value with our
customers worldwide. The combined company will have an autonomous
agricultural subsidiary, which will retain the name Monsanto. The Searle,
Upjohn, and Pharmacia names will be used to designate sales divisions in
the new company in order to maximize the strong, existing customer
awareness and relationships associated with these businesses.
Q4 WHERE WILL THE NEW COMPANY BE HEADQUARTERED?
A4 The new company will have several key locations. Corporate and
pharmaceutical headquarters will be located in Peapack, New Jersey. The
company's agricultural business will be headquartered in St. Louis.
Q5 YOU'VE SAID THAT THE COMBINED COMPANY EXPECTS TO ACHIEVE ANNUAL SYNERGIES
OF $600 MILLION. WHAT'S THE NATURE OF THESE SYNERGIES?
A5 These synergies will consist of cost avoidance and elimination of
duplication. (Guidance: This does not include any top-line synergies, such
as enhanced revenue as a result of having a greater sales force presence.)
Q6 WHAT RISKS ARE INVOLVED WITH THIS MERGER?
A6 In order to provide guidance to our shareowners, several risk factors
related to the combined company's financial condition, results of
operations, and business after the merger are outlined in the proxy.
Q7 WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED?
A7 We expect to complete the merger during the second quarter of 2000. We
will work toward completing the merger as quickly as practicable. In
addition to stockholder approvals, we must work to obtain regulatory
approvals.
Q8 WHEN WILL THE P&U TICKER SYMBOL BE DELISTED?
A8 On the day the merger closes or the following day.
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Q9 WILL SHARES OF THE NEW COMPANY BE LISTED ON THE STOCKHOLM STOCK EXCHANGE?
A9 Pharmacia Corporation shares will be listed on the New York Stock
Exchange. Monsanto and Pharmacia & Upjohn have agreed to use their
reasonable best efforts to have the new company's common stock listed on
the Stockholm Stock Exchange.
Q10 WHAT WILL BE THE NUMBER OF SHARES OUTSTANDING OF THE NEW COMPANY BE AT THE
TIME OF THE MERGER?
A10 We can't project the exact amount at this point. As of January 26, 2000,
Pharmacia & Upjohn had 520 million common shares outstanding and Monsanto
had 637 million shares outstanding.
Q11 WHAT WILL BE THE PRICE OF THE SHARES IN THE NEW COMPANY?
A11 The opening price on the day of the merger will be determined by the
market at the time of the merger.
Q12 DO YOU EXPECT THE STOCK PRICE AND P/E RATIO OF THE NEW COMPANY TO BE LESS
THAN MONSANTO'S OR PHARMACIA & UPJOHN'S ONCE THE MERGER IS COMPLETE?
A12 Just as we can't predict the market's immediate reaction, neither can we
predict the stock price or the P/E ratio of the new company following the
merger.
Q13 WHAT'S THE EXPECTED 2000 EPS FOR THE COMBINED COMPANY AND, ASSUMING THE
MERGER IS COMPLETE BY THE END OF 2000, WHAT ARE THE 2001 EPS ESTIMATE FOR
THE NEW COMPANY?
A13 As previously announced, the estimated EPS for 2000 will be in the range
of $1.55 to $1.62. After 2000, annual EPS growth of more than 20% is
expected. Such estimates are subject to many uncertainties.
Forward-looking statements are based on current expectations, but actual
results may differ materially from anticipated future events or results.
Q14 WHAT WILL THE MERGER DO TO YOUR FINANCIAL RATIOS?
A14 As an all-stock deal, the transaction will create no additional debt.
Combined, our pro forma net debt to capitalization ratio (as of Sept. 30,
1999) would have been roughly 40 percent. The combined enterprise will
have substantial financial capacity for future growth.
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Q15 HOW DO YOU EXPECT RATING AGENCIES TO REACT?
A15 As an all-stock deal, the transaction creates no additional debt, while
creating new strengths, new revenue opportunities and new cost-reduction
and cost-avoidance opportunities. We will be discussing these factors with
our rating agencies.
Q16 WHAT IS THE ESTIMATED PRETAX CHARGE THAT THE NEW COMPANY WILL TAKE ONCE
THE MERGER IS CLOSED TO ACCOMMODATE THE ANTICIPATED EMPLOYMENT
REDUCTION/SEVERANCE PACKAGES?
A16 With the best information available to us today, we estimate taking merger
and restructuring-related charges of $500-$800 million to cover the costs
associated with the elimination and consolidation of duplicate facilities,
employee severance and other costs resulting from the merger. The exact
timing, nature and amount of these transition costs are subject to change;
however, it's expected that the majority of the transition costs will be
recorded at the close of the merger, with the remaining costs to be
incurred over a three year period following the close of the merger.
Q17 WHAT ABOUT THE AG BUSINESS - HOW DO YOU EXPECT RATING AGENCIES TO REACT TO
AN INDEPENDENTLY MANAGED AG BUSINESS DOWN THE ROAD?
A17 It's our intention to establish a capital structure for the Ag business
that provides for a strong financial position.
Q18 IF THE STOCK OF MONSANTO OR PHARMACIA & UPJOHN MOVES SIGNIFICANTLY UP OR
DOWN BETWEEN NOW AND CLOSING, HOW WILL THAT AFFECT THE TRANSACTION, AND
THE RESPECTIVE STAKES OF MONSANTO AND PHARMACIA & UPJOHN SHAREOWNERS IN
THE NEW COMPANY?
A18 The exchange ratio is fixed and will not fluctuate with market volatility.
We believe this is the most appropriate structure for a merger of this
type.
Q19 WHAT WILL THE COMBINED DEBT LEVEL BE?
A19 Based on Sept. 30, 1999, financial information, it is less than $7 billion
(net of cash). The debt position of the combined company, however, would
decline substantially with the completion of the planned divestitures and,
potentially, the ag IPO.
Q20 WHAT IS THE EXCHANGE RATIO FOR THE TRANSACTION?
A20 Monsanto shareholders will retain their existing shares and Pharmacia &
Upjohn shares will be exchanged for 1.19 shares of the combined company.
Based on this ratio, Monsanto's shareowners would own
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approximately 51 percent of new company; Pharmacia & Upjohn, 49 percent.
Q21 THE PROXY STATES THAT EITHER PHARMACIA & UPJOHN OR MONSANTO CAN TERMINATE
THE AGREEMENT IF, AMONG OTHER SCENARIOS, EITHER COMPANY APPROVES OR
RECOMMENDS A SUPERIOR PROPOSAL BY A THIRD PARTY OR DETERMINES THAT A
SUPERIOR PROPOSAL HAS BEEN MADE BY A THIRD PARTY. DO YOU EXPECT ANOTHER
COMPANY TO OFFER SUCH A SUPERIOR PROPOSAL?
A21 We cannot speculate on the actions of other companies. Both companies
continue to work toward completing the merger as quickly as practicable.
The merger process is moving ahead as both companies have expected.
Q22 UNDER THE TERMS OF THE MERGER AGREEMENT, WHAT HAPPENS IF THE MERGER ISN'T
COMPLETED BY DECEMBER 31, 2000?
A22 The merger then can be terminated by either party. However, a party cannot
terminate if it was the party responsible for the delay.
Q23 ARE THERE TERMINATION FEES?
A23 Either Pharmacia & Upjohn or Monsanto will be required to pay the other a
fee of $575 million (less any termination fee previously paid) if it
terminates the merger agreement under conditions detailed in the proxy.
Either Pharmacia or Monsanto will be required to pay the other a fee of
$250 million if the merger agreement is terminated as a result of its
Board of Directors adversely changing its recommendation of the merger. If
shareholders of one of the companies simply vote down the merger because
they do not like the deal, no break-up fee is payable. Monsanto and
Pharmacia & Upjohn also entered into reciprocal stock option agreements
that could permit either party to receive as a result of both the receipt
of a termination fee and the exercise of the option a total of $635
million.
MERGER VOTE QUESTIONS
Q1 WILL MONSANTO SHAREOWNERS RECEIVE ANY SHARES AS A RESULT OF THE MERGER?
A1 No. Monsanto shareowners will continue to hold the Monsanto shares they
currently own. After the merger, these shares will automatically represent
shares of the new company.
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Q2 WHY WILL MONSANTO'S SHAREOWNERS RETAIN THEIR STOCK CERTIFICATES? IF YOU'RE
REALLY CREATING A NEW COMPANY HERE, WHY NOT HAVE MONSANTO STOCK
CERTIFICATES TURNED IN FOR THE NEW COMPANY'S STOCK CERTIFICATES?
A2 Since the majority (51 percent) of shares in the new company will
initially be held by current Monsanto shareowners, it was determined not
to go to the added expense of transferring these shares to certificates
for stock in the new company. However, as shares are issued in the new
company, the stock certificates will bear the new company's name.
Q3 DOES THIS DEAL CONSTITUTE A CHANGE OF CONTROL FOR EITHER COMPANY?
A3 For the purpose of certain Monsanto and P&U employees - yes; for the
purpose of Delaware law - no. This transaction is structured as a merger
of equals.
Q4 HOW MANY MONSANTO SHAREOWNER VOTES ARE NECESSARY TO APPROVE THE CHARTER
AMENDMENTS AND THE ISSUANCE OF SHARES AND OTHER PROPOSALS IN THE MERGER
WITH PHARMACIA & UPJOHN? WHAT IS THE LIKELIHOOD OF MONSANTO SHAREOWNERS
NOT APPROVING THE ISSUANCE OF SHARES IN THE MERGER?
A4 A simple majority of Monsanto's outstanding shares is necessary to approve
the charter amendments and a majority of Monsanto's shares present or
represented by proxy at the meeting is necessary to approve the issuance
of shares in the merger. While we can't predict how shareowners may vote
on the merger, we believe the merger will be positive for the shareowners
of both companies given the enhanced growth opportunities and the enhanced
ability to compete in the global pharmaceutical and agricultural
marketplace this combination will create.
Q5 HOW MANY PHARMACIA & UPJOHN SHAREOWNER VOTES ARE NECESSARY TO APPROVE THE
MERGER?
A5 Approval of the merger by Pharmacia & Upjohn shareowners requires the
affirmative vote of a majority of the votes entitled to be cast by holders
of outstanding Pharmacia & Upjohn common stock and Pharmacia & Upjohn
convertible preferred stock voting as a single class.
Q6 WHAT HAPPENS IF THE SHAREOWNERS DON'T APPROVE THE MERGER?
A6 The merger cannot be completed without approval by both Monsanto and
Pharmacia & Upjohn shareowners. While we can't predict how shareowners may
vote on the merger, we believe the merger will be positive for the
shareowners of both companies given the enhanced growth opportunities this
combination will create.
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MANAGEMENT AND COMPENSATION QUESTIONS
Q1 WHO WILL MANAGE THE NEW COMPANY?
A1 Upon the closing of the merger, Robert B. Shapiro will be the non-
executive chairman and Fred Hassan will be the president and chief
executive officer. Eighteen months after the merger occurs, Fred Hassan
will become the Chairman and CEO of the Pharmacia Corporation unless
otherwise determined at that time by the affirmative vote of 80 percent of
the board of directors. The exact organizational structure will be
determined in the coming weeks. However, the two key businesses are
pharmaceuticals and agriculture. Key appointments to date include Richard
U. De Schutter as senior executive vice president; Christopher Coughlin as
executive vice president and chief financial officer; and Philip
Needleman, Ph.D., as chief scientific officer. Hendrik A. Verfaillie has
been named the CEO of the agricultural business.
Q2 HOW WILL MR. HASSAN AND MR. SHAPIRO'S COMPENSATION BE STRUCTURED FOR THE
NEW COMPANY?
A2 Mr. Hassan's compensation will consist, at a minimum, of a base salary of
$1,200,000 per year, and a bonus of up to 100 percent of his salary
depending on achievement of performance-based goals. Mr. Hassan's
agreement also provides for welfare benefits, participation in company
retirement and incentive plans, and his use of company-provided
transportation for security reasons.
Mr. Shapiro's agreement includes annual compensation of $50,000 per year
for his service as chairman, in addition to regular board fees and
$480,000 per year for his services as a senior adviser to Pharmacia
Corporation through December 31, 2003. Also during the term of the
agreement, Mr. Shapiro will receive welfare benefits, secretarial services
and security services, including company-provided transportation.
BOARD-RELATED QUESTIONS
Q1 THE PROXY STATES THAT THE PHARMACIA BOARD WILL CONTAIN TEN INDIVIDUALS
DESIGNATED BY MONSANTO AND TEN INDIVIDUALS DESIGNATED BY PHARMACIA &
UPJOHN. WHO ARE THE TEN PHARMACIA & UPJOHN MEMBERS AND WHY WERE THEY
SELECTED?
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A1 The Pharmacia & Upjohn designees will be drawn from their current
directors, but the specific individuals have not been announced.
Q2 TWENTY BOARD MEMBERS SEEM EXCESSIVE. WOULDN'T A SMALLER BOARD - AND
PERHAPS ONE WITH FEWER INSIDERS - BE MORE APPROPRIATE FOR THE NEW COMPANY?
A2 In creating a merger of equals, Pharmacia & Upjohn and Monsanto agreed to
have equal representation on the new company's board of directors. Both
companies have a good mix of people with a range of expertise on their
individual boards.
Q3 HOW WILL THE BOARD OF DIRECTORS FOR THE NEW COMPANY BE COMPENSATED?
A3 Directors who are employees of the company will not receive compensation
for their service on the board. The specific terms of compensation to be
paid to non-employee directors of the new company have not yet been
determined.
STOCK QUESTIONS
Q1 WHY HAS THE GAP IN THE STOCK PRICES BETWEEN THE TWO COMPANIES BEEN
WIDENING WHEN IT SHOULD BE TRADING CLOSE TO THE EXCHANGE RATIO BETWEEN THE
TWO COMPANIES?
A1 It is company policy not to speculate on the gap in stock prices.
Q2 WHAT HAPPENS TO MY FUTURE DIVIDENDS?
A2 Pharmacia & Upjohn current quarterly dividend is $0.27 per share of
Pharmacia & Upjohn common stock, or $1.08 per share on an annual basis.
Monsanto's current quarterly dividend is $.03 per share of Monsanto common
stock, or $0.12 per share on an annual basis. The combined company's
dividend policy will be set by its board of directors. One alternative
that the combined company's board of directors could pursue is to set an
initial dividend rate approximately equal to the average of Monsanto's and
Pharmacia & Upjohn's current dividend rates, so that the aggregate amount
of dividends paid by the combined company is approximately the same as the
aggregate amount of dividends paid by Monsanto and Pharmacia & Upjohn. The
amount of dividends will depend on a number of factors, including the
combined company's financial condition, capital requirements, results of
operations, future
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business prospects and other factors that the company's board of directors
may deem relevant.
Q3 WILL I RECEIVE CASH OR STOCK CERTIFICATES FOR FRACTIONAL SHARES?
A3 Pharmacia & Upjohn shareowners will receive a cash payment for the value
of fractional shares.
Q4 WHAT ARE THE TAX CONSEQUENCES OF THE MERGER TO SHAREOWNERS?
A4 The merger generally will be tax-free for U.S. federal income tax purposes
for Pharmacia & Upjohn or Monsanto shareowners, except in those cases
where Pharmacia & Upjohn shareowners receive cash in lieu of fractional
shares of stock. Those cash proceeds, which will be negligible, will be
taxable.
Q5 WILL THE MERGER BE TAX-FREE TO SHAREOWNERS LIVING OUTSIDE THE UNITED
STATES?
A5 In some countries, the merger may trigger a taxable event for shareowners.
Q6 WHAT WILL PHARMACIA & UPJOHN SHAREOWNERS' TAX BASIS BE IN THE NEW COMPANY
COMMON STOCK THEY'LL RECEIVE IN THE MERGER?
A6 For Pharmacia & Upjohn shareowners, the tax basis in your total shares of
the new company's common stock will equal your current tax basis in your
Pharmacia & Upjohn common stock reduced by any cash amount you would
receive in lieu of fractional shares of stock.
PROXY VOTING QUESTIONS
Q1 AS A SHAREOWNER, WHAT DO I NEED TO DO NOW?
A1 Each company filed preliminary proxy material on January 28, 2000, which
may be subject to SEC review. There is nothing you need to do until each
company sends shareowners final proxy materials, including proxy cards,
for the special meetings of shareowners.
Q2 SHOULD I SEND IN MY STOCK CERTIFICATES NOW?
A2 No. After the merger is completed, we will send Pharmacia & Upjohn
shareowners written instructions for exchanging their share certificates.
Monsanto stockholders will keep their existing certificates.
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Q3 WORD IS THAT MONSANTO'S MERGER WITH AHP FAILED DUE TO A CLASH IN CORPORATE
CULTURES AND TOP MANAGEMENT. WHY DON'T YOU THINK THIS WILL HAPPEN WITH
THIS MERGER?
A3 Both companies are committed to completing this merger. The integration
process is underway and going well.
Q4 HAVE MONSANTO AND PHARMACIA & UPJOHN FILED THE INITIAL NECESSARY
NOTIFICATIONS TO FEDERAL AUTHORITIES FOR THE MERGER? IF SO, WHEN?
A4 Monsanto and Pharmacia & Upjohn each filed the required notification and
report forms with the Antitrust Division of the U.S. Department of Justice
(DOJ) and the Federal Trade Commission (FTC) on Jan. 19, 2000.
Q5 WHICH GOVERNMENT AGENCY IS REVIEWING THE MERGER FROM AN ANTITRUST
PERSPECTIVE - THE DOJ OR THE FTC?
A5 The FTC is reviewing the merger.
Q6 WILL PHARMACIA CORPORATION BE REQUIRED TO DIVEST CERTAIN ASSETS IN ORDER
TO GAIN REGULATORY APPROVAL?
A6 We believe that, in great measure, these two companies have products and
assets that complement each other. We're confident we will obtain all
required clearances.
Q7 HOW DOES THE MERGER AGREEMENT AFFECT THE PLANNED DIVESTITURES OF
MONSANTO'S SWEETENERS AND BIOGUM BUSINESS?
A7 The sweeteners and biogums business divestitures continue to move ahead.
The merger agreement does not preclude Monsanto from completing these
transactions.
MERGER APPROVAL
Q1 WHAT OTHER APPROVALS ARE NECESSARY BEFORE PHARMACIA & UPJOHN AND MONSANTO
CAN PROCEED WITH THE MERGER?
A1 In addition to satisfying the requests of the FTC and the required
shareowner approvals, the merger is subject to European regulations,
including approval of the European Commission and review and approval of
regulatory bodies in other (non-EU) European countries.
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Q2 WHEN WILL THE MERGER RECEIVE EUROPEAN COMMUNITY APPROVAL?
A2 We have informally notified the European Commission of the merger, and
expect to make the required formal pre-merger filing in February 2000.
Q3 DO YOU ANTICIPATE DIFFICULTY WITH REGULATORY APPROVALS IN THE UNITED
STATES, EUROPE OR OTHER FOREIGN COUNTRIES?
A3 No. We see no issues that are reasonably likely to delay the completion of
this transaction.
LEGAL QUESTIONS
Q1 WHAT LAW FIRMS ADVISED? WHAT INVESTMENT BANKERS?
A1 Monsanto was advised by (legal) Wachtell, Lipton, Rosen & Katz; and by
(investment bankers) Goldman, Sachs & Co. and Morgan Stanley & Co.
Incorporated. Pharmacia & Upjohn was advised by Sullivan & Cromwell
(Corporate legal) Davis Polk & Wardwell (Tax and Antitrust legal); and by
(investment bankers) JP Morgan Securities and Bear, Stearns & Co. Inc.
Q2 WHAT WILL THE ACCOUNTING TREATMENT BE FOR THE NEW COMPANY?
A2 We expect the merger to qualify as a pooling of interests, which means
that we will treat our companies as if they had always been combined for
accounting and financial reporting purposes. However, completion of the
merger is not conditioned on the merger qualifying as a pooling of
interests for financial accounting purposes.
Q3 WILL A POOLING TRANSACTION OF THIS MAGNITUDE AFFECT THE COMBINED COMPANY'S
ABILITY TO PURSUE FUTURE ACQUISITIONS? HOW WILL IT AFFECT OTHER DEALS
CURRENTLY UNDER WAY?
A3 We can't project how future transactions might be handled. However, we've
carefully studied the pooling option and believe it is the appropriate
accounting treatment for this transaction. We don't expect that this
treatment will effect any transactions currently in progress.
Q4 DOES EITHER COMPANY HAVE A SHARE REPURCHASE PROGRAM IN EFFECT, AND IF SO
WILL THE POOLING NATURE OF THE TRANSACTION AFFECT THAT OR FUTURE
REPURCHASE PROGRAMS?
A4 Neither company has a share repurchase program now in effect.
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Q5 ARE THERE ANY OUTSTANDING SHAREOWNER LITIGATION ISSUES SPECIFICALLY
RELATED TO THE MERGER? IF SO, WHAT'S THE STATUS?
A5 No.
Q6 ARE THERE ANY OTHER LITIGATION ISSUES OUTSTANDING WHICH COULD BE AFFECTED
BY THE MERGER?
A6 No pending litigation will be affected by the merger.
Q7 THE PROXY SAYS THAT THE NEW COMPANY ANTICIPATES SIGNIFICANT EXPENSES AND
RESTRUCTURING CHARGES ASSOCIATED WITH THE MERGER. ISN'T A SIZABLE PORTION
OF THIS RELATED TO STOCK COMPENSATION FOR MONSANTO EMPLOYEES? WHY SHOULD
THE SHAREOWNERS OF MONSANTO AND PHARMACIA & UPJOHN BEAR THE COST OF THESE
WINDFALLS?
A7 Monsanto's change of control provisions are consistent with competitive
practice and are designed to enable the company to attract and retain the
best executive talent even during time of uncertainty created by possible
mergers.
Q8 WHAT IS THE ESTIMATED PRETAX CHARGE THAT THE NEW COMPANY WILL TAKE ONCE
THE MERGER IS CLOSED TO ACCOMMODATE THE ANTICIPATED EMPLOYMENT
REDUCTION/SEVERANCE PACKAGES?
A8 With the best information available to us today, we expect to incur
pre-tax charges to operations, currently estimated to be between $500 and
$800 million, to reflect costs associated with combining the operations of
the two companies. These costs will be recorded subsequent to consummation
of the merger. These amounts are preliminary estimates and are therefore
subject to change. Additional unanticipated expenses may be incurred in
the integration of our business.
AGRICULTURE IPO
Q1 CAN YOU EXPLAIN THE PROPOSED IPO OF THE AG BUSINESS?
A1 An initial public offering of up to 19.9 percent of the ag business will
be sought as soon as feasible following closing of the Pharmacia &
Upjohn/Monsanto merger. By making an initial public offering for a portion
of the Ag business, we can highlight the value inherent in this leading
agricultural enterprise, and improve the financial capacity and
flexibility of the Ag businesses while enhancing both groups' abilities to
pursue future growth opportunities.
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Q2 DOES THIS MEAN THAT THE NEW COMPANY IS NOT COMMITTED TO THE AG BUSINESS?
A2 Monsanto's agricultural business continues to perform well, especially in
a difficult Ag economy. It has a strong portfolio of agricultural crop
protection, seed and biotechnology assets that are important today and
well positioned to compete in an industry that is rapidly changing.
Q3 HOW WILL THE PROCEEDS OF THE IPO BE USED?
A3 The proceeds of the Ag business IPO will be used to finance working
capital and pay down debt of the Ag business and to strengthen the Ag
business' financial structure.
Q4 HOW WAS THE `UP TO 19.9 PERCENT' DETERMINED FOR THE AG IPO?
A4 The percentage of the company to be made available through an IPO was
determined based on the desired financial structure of the Ag company.
Q5 IS THERE AN EXPECTATION THAT THE AG BUSINESS WILL BECOME AN ENTITY
COMPLETELY SEPARATED FROM THE NEW COMPANY'S PHARMACEUTICAL BUSINESS?
A5 The Ag company will be a separately managed enterprise with a separate
board of directors. The structure, with an IPO for a portion of the Ag
business, maximizes the potential value that business can create.
Q6 WHO WILL COMPRISE THE AG BUSINESS' BOARD OF DIRECTORS?
A6 To be determined.
Q7 WHAT DEBT LEVELS WILL THE AG BUSINESS ASSUME?
A7 This has not been determined. This will be part of the process of
determining how the Ag IPO will roll out.
This Question and Answer Document contains certain forward-looking statements,
including, among other things, statements regarding each company's results of
operations and expected closing date of the merger. These forward-looking
statements are based on current expectations, but actual results may differ
materially from anticipated future events or results. Certain factors which
could cause each company's individual and the combined company's actual results
to differ materially from expected and historical results are described in
Monsanto's and Pharmacia & Upjohn's periodic reports filed with the Securities
and Exchange Commission, including Monsanto's and Pharmacia & Upjohn's 1998
annual reports, on Forms 10-K and Exhibits 99 thereto, respectively.
Monsanto and Pharmacia & Upjohn have filed a preliminary joint proxy statement
and prospectus with the United States Securities and Exchange Commission (the
"SEC"). In addition, Monsanto and Pharmacia & Upjohn will be filing a definitive
joint proxy statement/prospectus and other relevant documents concerning the
merger with the SEC. WE URGE INVESTORS TO READ THE DEFINITIVE JOINT PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC,
BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain the
documents free of charge at the SEC's website, www.sec.gov. In addition,
documents filed with the SEC by Monsanto will be available free of charge from
the Secretary of Monsanto at 800 North Lindbergh Blvd., St. Louis, Missouri
63167, Telephone (314) 694-1000. Documents filed with the SEC by Pharmacia &
Upjohn will be available free of charge from the Corporate Secretary of
Pharmacia & Upjohn, 100 Route 206 North, Peapack, NJ 07977, Telephone (888)
768-5501. READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE
MAKING A DECISION CONCERNING THE MERGER.
Monsanto, its directors, executive officers and certain other members of
management and employees may be soliciting proxies from Monsanto stockholders in
favor of the merger. Information concerning the participants in the solicitation
is set forth in the Current Report on Form 8-K filed by Monsanto with the SEC on
January 25, 2000.
Pharmacia & Upjohn, its directors, executive officers and certain other members
of management and employees may be soliciting proxies from Pharmacia & Upjohn
stockholders in favor of the merger. Information concerning the participants in
the solicitation is included in filings under Rule 425 made by Pharmacia &
Upjohn with the SEC on January 27, 2000.
