After having tried without success to find a buyer for its chemicals business, North American chemicals operation, Monsanto, supplier of PVB to the glass industry, has decided to spin off the business…
After having tried without success to find a buyer for its chemicals business, North American chemicals operation, Monsanto, supplier of PVB to the glass industry, has decided to spin off the business in a move that will allow the company to focus on its faster-growing agriculture, food and healthcare units. It is expected that between 1,500 and 2,500 of a group total of 28,500 jobs worldwide will be lost in the operation, causing the company to make a US$ 400 million to US$ 600 million fourth-quarter charge against earnings. “After careful consideration, we“re convinced these businesses must operate separately to reach their maximum potential and thereby unlock significant value in both,” said Monsanto“s chairman, Robert Shapiro. Shapiro will be in charge of the post-spin-off Monsanto while executive vice president Robert Potter, who runs the chemicals business, will head the new company. The tax-free spin-off proposed would create a new firm by the end of 1997. Current Monsanto shareholders would keep their Monsanto shares and get shares in the new concern as a special dividend, the company said. Monsanto, which reported 1995 profits of US$ 739 million, or US$ 1.25 a share, is expected to make per-share profits for 1996 of US$ 1.50. Monsanto said the spin-off requires shareholder approval and clearance by government agencies and the Internal Revenue Service for it to be tax-free. The operation is intended to be completed no later than the end of 1997. Until then, the two companies will operate separately within Monsanto.