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Thursday, March 4, 1999 Published at 16:06 GMT

Business: The Company File

Biotechnology giant stalks the countryside

Monsanto has been experimenting with GM crops

A merger between biotechnology giants Monsanto and DuPont is rumoured, in a move certain to fuel the furore over genetically-modified (GM) food.

The merger speculation was stirred by the New York Times, which published an article on Monsanto Chief Executive Robert Shapiro.

A merger would create the world's largest biotechnology company, which would dominate the agricultural sector.

There has been recent concern over the health and environmental risks of introducing genetically-modified food into the food chain.

[ image: A merger would produce a biotechnology powerhouse]
A merger would produce a biotechnology powerhouse
There is currently a one-year ban on the commercial growing of GM food in the UK. But environmental groups have called for the ban to be extended until more is known about its effects.

Monsanto recently admitted failing to ensure that GM rapeseed would not escape into the British countryside.

It was fined a total of £31,000 ($45,000) for breaching government regulations, along with UK-based Perryfields.

Monsanto's shares rose on Thursday by $2.25 to $46.43 on the New York stock Exchange, with nearly 4m shares changing hands.

DuPont, the largest chemical company outside Germany, saw its stocks fall $1.13 to $50.19.

Caution advised

But analysts advised caution, and said such a combination would come up against serious US antitrust hurdles.

They were sceptical about Mr Shapiro's readiness to strike up the deal after the collapse of Monsanto's merger with American Home Products in October.

Monsanto is far smaller than DuPont, with $9bn in annual revenues, compared to the latter's $25bn revenues in 1998.

The merger would help compensate for recent setbacks as well as the financial strain posed by $6bn in acquisitions.

Both the pharmaceutical and chemical industries have seen a wave of mergers in recent months, with French and German chemical giants Hoechst and Rhone Poulenc agreeing an alliance in December, while the UK's Zeneca is in the midst of merging with Swedish pharmacetucal giant Astra.

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