MONSANTO'S CHOICES
STAY INDEPENDENT AND MAINTAIN ITS STRATEGY
PRO
Monsanto keeps intact its life sciences vision and retains its impact on the community.
CON
The company risks stock price beating, analyst opposition and shareholder lawsuits. Option provides no protection against chronic crop biotech protests and doesn't accelerate debt-cutting efforts.
MERGE WITH A DRUG/CHEMICAL GIANT
PRO
Monsanto relieves its debt burden, and provides marketing money and muscle. The company maintains research money.
CON
Control over research goals is cut, unless deal is true merger of equals. Monsanto's corporate identity weakens. Culture issues emerge, and the move could spark layoffs
SELL THE WHOLE COMPANY
PRO
The benefits are similar to a merger: Monsanto relieves its debt burden, and provides marketing money and muscle. The company maintains research money.
CON
Severe job cuts result, especially if deal is hostile. Control over research ends; Monsanto's corporate identity is erased. Community/philanthropy efforts are hurt. Tax consequences are more severe.
MAKE A DEAL WITH A BIG BIOTECH COMPANY
PRO
A joint venture/merger with Genentech, Biogen, etc. keeps research aim on farm and pharmacy efforts, adds marketing clout to biotech firms and offers better tax benefits than a sale.
CON
High-leveraged, high research-spending companies are combined. The move doesn't offer quick debt relief, doesn't solve crop biotech albatross and raises questions of whose vision prevails.
SPIN OFF SEARLE AS AN INDEPENDENT COMPANY
PRO
Gives a quick cash infusion to cut debt, offers a home for the drug unit, provides better tax deal than selling Searle, and calms investors and analysts -- at least for a while.
CON
The move kills vision of life sciences, chokes off big profit-producer in Celebrex arthritis drug, leaves farm/biotech unit isolated and puts Monsanto in play for takeover.
PARTNER WITH ANOTHER COMPANY
PRO
Move could relieve some financial pressure. Partners could combine marketing forces, whether the deal is with Monsanto or just Searle. The move offers a better tax deal than outright sale.
CON
A joint venture requires a clear understanding of who's in charge. This option's track record is mixed in life sciences. Corporate culture and layoff issues could emerge.