Monsanto mum on NutraSweet speculation

07 May 1999 21:54  [Source: ICIS news]

HOUSTON (CNI)--Monsanto told CNI Friday it would have no comment about growing speculation among analysts that its NutraSweet business is vulnerable to a sale.

Speculation began after Monsanto ignored its NutraSweet business and other products in its nutrition products division during a lengthy meeting Monday with analysts in New York City.

Monsanto's nutrition and consumer products division generated sales of $1.5bn (Euro1.4bn) for the St Louis, Missouri life sciences company last year, representing about 17% of its total $8.7bn.

Analysts have wondered about the future of NutraSweet for some time, particularly since the failure of Monsanto's attempt at a merger with American Home Products. And Monsanto has acknowledged the need to sell some units so it can raise cash for acquisitions.

Recent divestitures have generated about $440m and pending sales could add $400m more to Monsanto's books. In its Monday meeting, however, Monsanto told analysts it wants to raise $1.5bn-$2bn while touting the expectations for its arthritis drug Celebrex and future sales of Roundup.

Thursday's edition of the St Louis Post-Dispatch quoted one analyst as saying that Monsanto must offer NutraSweet if it is serious about reducing its debt. The article also emphasised the absence of executives from the nutrition division during the day-long meeting, noting, "Monsanto's silence spoke volumes about NutraSweet's future."

Within the nutrition division, NutraSweet food ingredient sales fell 17% last year, according to Monsanto. But one analyst pegged last year's sweetener sales at $600m.

Several analysts also have emphasised their belief that NutraSweet ranks as a potentially large asset for Monsanto that now stands outside the company's mainstream businesses for growth.

By: Gary Taylor
+1 713 525 2653

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