American Home Products to buy Monsanto; $33 billion deal costs St. Louis a Fortune 500 company

American Home Products Corp. has agreed to buy Monsanto Co. for $33 billion in stock, creating a company with products ranging from over-the-counter drugs to genetically engineered seeds.

In what the companies called a merger of equals, American Home Products agreed to buy Monsanto by exchanging 1.15 of its shares for each share of Monsanto. American Home Products' stock climbed $0.9375 on Monday to close at $49.25. Monsanto's stock fell $0.875 to close at $54.50.

The two said they were combining in a deal that would create a company with a market capitalization of more than $96 billion, with 1998 sales totaling $23 billion from products in such areas as life sciences, agriculture pharmaceuticals and household goods.

The combined company will have a 22-member board of directors, with representation equally divided between American Home Products and Monsanto. Robert Shapiro, Monsanto chairman and chief executive officer, and John Stafford, chairman, president and CEO of American Home Products, will be co-chairmen and co-CEOs.

The deal takes the number of Fortune 500 companies in St. Louis down to nine. Corporate headquarters of the new company will be in Madison, N.J., where American Home Products is located. The company's agricultural business will be based in St. Louis, where Monsanto has its headquarters. Monsanto is the 29th-largest employer in St. Louis, with 4,000 local employees. The company has 20,000 workers worldwide.

American Home Products has sold its two other St. Louis companies. It used to own Sherwood Medical and Storz Instruments.

American Home Products makes Chapstick, Robitussin cough medicine and Advil.

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