Pharmaceutical giants

NEW YORK (AP) — Two giants of the pharmaceutical industry, American Home Products Corp. and Monsanto Co., called off their $33.6 billion merger Tuesday over what some analysts said was a clash between executives over who would run the merged business.
Monsanto, based in St. Louis, makes the artificial sweetener Nutrasweet and is involved in genetic research for agriculture. American Home Products of Madison, N.J., makes Robitussin cough syrup, Advil pain reliever and Chap Stick lip balm.
The merger, announced in June, would have been the largest ever in the pharmaceutical industry, creating a company with $3 billion in expected annual profits.
Investors had expected the merger to yield cost savings. Both company’s stock plunged on news of the breakup.
Monsanto plummeted 26.6 percent, or $13.37, to $37 a share on the New York Stock Exchange. American Home Products fell 10 percent, or by $5, to $45 a share, also on the NYSE.
The companies refused to say what killed the deal. But some analysts said a clash of corporate cultures may have brought down the merger. Monsanto is more focused on long-term strategies, while American Home has focused on existing products, the analysts said.
Plans to have the two companies’ chief executives share duties also could have been a deal-breaker.
“The dual-CEO strategy was a bit unwieldy with each CEO believing he would be the survivor though neither man was going to give ground,” said James Kelleher, an analyst with Argus Research.
The failure to complete the deal marks the second time this year that American Home was unable to close on a major transaction.
In February, American Home had discussed merging with British drug maker SmithKline Beecham PLC. But SmithKline backed out in favor of talks with Glaxo Wellcome PLC, which later were aborted.