Monsanto and Pharmacia & Upjohn to Merge, Creating Global Leader in Pharmaceuticals With Top-Tier Growth Prospects

* Build world class pharmaceutical business; combined pharmaceutical

sales force to enhance market potential of key products led by Celebrex

* Creates top-tier strength in critical U.S. market

* Robust pipeline and more than $2 billion annual pharmaceutical R&D

budget to fuel future growth

* Strong leadership and clear management structure to accelerate growth

potential and synergies

* Leading global agricultural business to be operated as a separate

entity, with a partial IPO to strengthen capabilities and help realize

full value

Dec 19, 1999, 00:00 ET from Monsanto Company

    ST. LOUIS and PEAPACK, N.J., Dec. 19 /PRNewswire/ -- Monsanto Company
 (NYSE:   MTC) and Pharmacia & Upjohn (NYSE:   PNU) today announced that they have
 entered into a definitive agreement to create a dynamic and powerful new
 competitor in the global pharmaceutical industry.  The new company will have
 one of the strongest sales forces in the global pharmaceutical industry, an
 expansive product portfolio, a robust pipeline of new drugs, including a
 number with blockbuster potential, and an annual pharmaceutical R&D budget of
 more than $2 billion.  The new company also will have one of the world's
 leading fully integrated agricultural businesses.  The combined company will
 have estimated 1999 sales of $17 billion with a market capitalization of more
 than $50 billion.
     The combined company, as yet to be named, will have a significantly
 strengthened position in the critical U.S. pharmaceutical market and
 complementary current and near-term products in key therapeutic areas.  It
 will have a leading sales force in the critical U.S. pharmaceutical market,
 which will account for more than 50 percent of the company's global
 pharmaceutical sales.
     The agricultural business has a leading global position in seeds,
 herbicides and biotechnology traits.  In conjunction with the creation of the
 new company, it is expected that up to 19.9 percent of the agricultural
 business will be offered in an Initial Public Offering (IPO).  The
 agricultural business will become a separate legal entity, with a stand-alone
 board of directors and its own publicly-traded stock upon completion of the
 intended IPO.
     Leading the combined organization as President and Chief Executive Officer
 will be Fred Hassan, the current CEO of Pharmacia & Upjohn.  Hassan will also
 have operational responsibilities for the new company's core pharmaceutical
 business.  Monsanto Chairman and CEO Robert B. Shapiro will become the
 non-executive Chairman for a period of 18 months, after which he will be
 succeeded by Hassan.
     The new company's corporate headquarters will be located in Peapack, N.J.,
 along with the pharmaceutical business.  The new company's agriculture
 business will be headquartered in St. Louis.
     Under the terms of the merger-of-equals transaction, which has been
 unanimously approved by both boards of directors, Pharmacia & Upjohn
 shareowners will receive 1.19 shares of the combined enterprise for each share
 of Pharmacia & Upjohn they now hold.  Each Monsanto share outstanding prior to
 the combination will represent one share in the combined company.  The
 transaction will be tax-free to the shareowners of both companies and is
 expected to be accounted for as a pooling of interests.  Monsanto shareowners
 would own approximately 51 percent of the combined company's shares.
     Driven by top-line synergies, the new company is expected to achieve a
 higher earnings level than either company on its own.  In addition, the new
 company plans to achieve annualized synergies of more than $600 million
 consisting of cost avoidance and elimination of duplication, some of which may
 be reinvested to accelerate growth opportunities.
     Commenting on the transaction, Mr. Shapiro said:  "The new company is
 being created from two rapidly growing organizations with strong global
 capabilities.  It is a merger driven from strength, and will have the
 appropriate scale and resources to capture the full value of its growth
 potential.  We'll also be achieving significant synergies as we combine
 two technology-driven, market-leading businesses.  The new company has a
 strong management structure.  Fred Hassan is a proven CEO, and I'm confident
 he will bring the same dynamism and focus on shareholder value to the new
 company that he brought to Pharmacia & Upjohn."
     Said Mr. Hassan:  "This is a combination designed to achieve both business
 growth and enhanced shareholder value over the near and long term.  We are
 creating a high-growth pharmaceutical company with a global leadership in
 sales and marketing, a superior R&D platform, and top-tier growth prospects,
 including several products with blockbuster potential.  At the same time, we
 are establishing a structure which gives our agricultural operations the scope
 and autonomy to be a leading independent entity in the agricultural field with
 high growth opportunity supported by a strong capital structure and the
 potential for direct shareholder investment."
     The new company's growing pharmaceutical business will be led by Celebrex,
 an innovative new treatment for arthritis launched in 1999 with sales to date
 of $1.4 billion; Xalatan, the world's top selling prescription medication for
 glaucoma; Detrol, the leading treatment for over-active bladder; Camptosar, a
 treatment for colorectal cancer; and Zyvox, a revolutionary new antibiotic
 expected to be launched in 2000.
     The new company has strong positions in a number of therapeutic areas,
 including arthritis and inflammation, antibiotics, oncology, cardiovascular,
 central nervous system, ophthalmology, urology and women's health.  The
 company also has a strong consumer healthcare business led by key global
 brands, including the Nicorette family of tobacco-dependency products and
 Rogaine/Regaine, a treatment for hair loss.
     The combined company's board of directors will consist of 20 members, with
 representation equally divided between Monsanto and Pharmacia & Upjohn.
 Planned key appointments include that of Monsanto's Richard U. De Schutter, as
 Senior Executive Vice President; Pharmacia & Upjohn's Christopher Coughlin, as
 Executive Vice President and Chief Financial Officer; Monsanto's Philip
 Needleman, Ph.D., as Chief Scientific Officer; and Monsanto's
 Hendrik A. Verfaillie as CEO of the agricultural business.  Further
 appointments will be announced during the course of the merger integration
     The transaction is expected to close in the second quarter of 2000,
 subject to approval by both companies' shareholders, normal governmental
 reviews and other customary conditions.
     This news release contains certain forward-looking statements, including,
 among other things, statements regarding each company's results of operations
 and expected cost savings and earnings per share effects.  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 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 and Forms 10-K and Exhibits 99 thereto, respectively.
     This announcement is not an offer to sell nor a solicitation to buy any
 securities.  The offering with respect to the proposed merger will be made
 only by the proxy statement/prospectus that will be distributed to shareowners
 in connection with their consideration of the transaction.

SOURCE Monsanto Company