regulatory reform bill put off indefinitely
TRANSCRIPT
seem to have a classical electronic distribution, he says. Rather, the electrons are delocalized over the dioxygen and two copper units. "I must say it is not a result I would have anticipated. If it turns out this peculiar electronic structure occurs in other binuclear bridged systems, it will be very interesting," Holm comments.
"I'm fascinated by the idea that solvent changes can break or form [the oxygen bonds]," adds Edward I. Solomon, a chemistry professor at Stanford University who studies tyrosinase, a binuclear copper enzyme. "I don't think it's understood how that works yet," he says, but chemists will no doubt soon be pursuing answers to those questions.
"It's a step that must be happening in a number of different areas," notes Joan S. Valentine, a professor of chemistry and biochemistry at the University of California, Los Angeles. "As we understand more about it, we'll understand more about some very important enzymatic steps in oxygen activation with metalloenzymes, so it provides a system you can actually study."
Elizabeth Wilson and Rudy Baum
Ciba, Sandoz merge to form giant Novartis Consolidation of the global pharmaceutical industry continued last week with announcement of one of the largest mergers in corporate history. Swiss drug finns Ciba-Geigy and Sandoz will form a new company, Novartis, that they say will be the second largest drugmaker in the world. It will have 4.4% of the global market, behind only Glaxo-Wellcome's 4.7%. The merger of Ciba and Sandoz, which had combined sales of nearly $30 billion last year, will become effective upon shareholder approval.
1995 was healthy for Sandoz, Ciba Sandoz Ciba
$ Million 1995
results % change from 1994
1995 results
Sales $12,705 -4% $17,252 -3% Operating profits 2,258 11 2,539 12 Net profits8 1,717 19 1,797 13
a After taxes and unusual items.
Ciba will spin off within 12 months its specialty chemicals division, which will become a separate publicly traded company. Sandoz—which spun off its specialty chemicals business last year to form Clariant—will also sell or spin off its construction chemicals operation. Together, the operations to be spun off had sales of $8.34 billion last year. After the demergers, Novartis' business mix will be health care, 59%; agribusiness, 27%; and nutrition, 14%.
Ciba Chairman Alex Krauer will be chairman of Novartis. Daniel Vasella, chief executive officer of Sandoz Pharma, Sandoz's pharmaceuticals division, will be Novartis president and head its executive committee. There will be 16 directors on the board, eight from each partner. The headquarters will be in Basel, the base for both Ciba and Sandoz.
In the pharmaceuticals field, Novartis will focus on several areas: immunology/inflammatory diseases; disorders of the central nervous system; cardiovascular, endocrine, and metabolic diseases; and oncology, asthma, and dermatology. The company will also maintain its markets in vision care— with contact lenses, lens care products, and ophthalmic products—and in a variety of over-the-counter products.
Novartis also will continue research in gene-, cell-, and organ-based therapies. Included is work on gene mapping and sequencing in more than a dozen collaborations with research institutions, such as the Stanford Human Genome Center—to which Sandoz last week contributed $1 million—the Max Planck Institute, and the Johns Hopkins Consortium.
The two firms also complement each other in nutrition products, including health foods, medical nutritionals, and the Gerber line of foods, which Sandoz acquired in August 1994. And in agribusiness, Novartis will play a major global role in agrochemicals for weed, disease, and insect control; in seeds;
and in animal health. According to the merg
er announcement, "Rapid integration and complementarity of the business areas will realize estimated synergies of [$1.5 billion] over three years," with half the savings coming in the first 18 months. Some of the savings will come in worldwide job re-
% change from 1994
ductions, although their extent is not yet clear.
The partners say the deal is structured as a merger of equals based on an exchange of shares. Sandoz shareholders will get 55% of the shares and Ciba shareholders will get the remaining 45%. Sandoz shareholders will receive one Novartis share for each Sandoz share. Ciba shareholders will receive Wis Novartis shares for each Ciba share.
Patricia Layman
Regulatory reform bill put off indefinitely A regulatory reform bill, scheduled to be brought to the House floor for a vote on March 5, was dropped from the schedule at the last minute. Its abrupt withdrawal dims the chances that Congress will pass this year any kind of major regulatory reform legislation, as promised in the House Republican "Contract With America."
The bill, H.R. 994, is generally supported by industry and opposed by the Administration and most environmental groups. It consists of three titles, or major sections.
Title I would allow small businesses and local governments to legally challenge federal agency assessments of the impact of proposed federal rules on the businesses and governments. Current law does not allow for such legal challenges. Title III would give Congress the power to veto any major regulation issued after November 1994.
However, most of the attention has focused on the highly controversial Title Π. That section would require federal agencies to conduct periodic reviews of new and existing major rules to determine whether to amend, terminate, or continue them. A major rule is defined as one having an annual impact on the economy of $100 million or more. Existing rules would be reviewed over a period of nine years; new rules would be reviewed during seven years from their adoption.
If a federal agency missed a review deadline, interested parties could seek a court-ordered deadline, and the rule could be suspended until that review was complete. Also, adversely affected persons could petition for review of minor rules. If the petition were denied, the petitioner could sue the agency.
MARCH 11,1996 C&EN 7
NEWS OF THE WEEK
Two factions of House Republicans— one led by Sherwood L. Boehlert (R-N.Y.) and the other led by David Mcintosh (R-Ind.)—disagree sharply over Title II and are trying to negotiate a compromise on this section of the bill. At a March 5 meeting attended by House Speaker Newt Gingrich (R-Ga.), Boehlert, Mcintosh, and others, it was decided that bringing the bill to the House floor in its current form would lead to bitter debate and possible defeat. Boehlert says the bill as currently written would perpetuate the GOP's bad environmental image. At press time, no date had been set to return the bill to the House for a vote, but efforts were being made to revive it.
The Chemical Manufacturers Association strongly endorses the bill. In crafting the bill, a House subcommittee worked closely with CMA and made many "accommodations" to the association, a Mcintosh aide tells C&EN.
A CMA spokesman calls the bill a good first step, a "down payment" on regulatory reform. "While this bill wouldn't hurt anything," he continues, "certainly it's not the comprehensive reform everyone agrees has to take place eventually—everything from a greater reliance on cost-benefit analysis to policies encouraging more voluntary initiatives."
However, Monsanto has broken ranks with CMA to oppose the House bill. In a March 5 letter to Boehlert, Monsanto says the bill will "weaken the system. Many of the requirements found in Title II will not yield better, more flexible approaches to protecting public health and the environment. They will place upon [the Environmental Protection Agency] a considerable amount of paperwork." And the letter stresses that "We need our products evaluated and reviewed by a system the public can trust."
EPA Administrator Carol M. Browner agrees with Monsanto. "Under this bill, EPA could be forced to reopen every environmental rule on the books, unnecessarily subjecting rules to a resource-intensive process of review"—which, at EPA alone, could cost taxpayers $1 billion a year, Browner says. 'If the agency did not complete the reviews on schedule, special interests could take vital public health protections to court and have them suspended."
The next concrete step in regulatory reform is expected in the Senate, where
Christopher Bond (R-Mo.) has introduced a bill that would set up boards to review the effects of regulations on small businesses. The boards would have some power to block implementation of rules.
Environmental groups see little good in either the Senate or the House bill.
"What they really serve as is just obstacles to keep the agencies from doing their job," says environmental analyst Jeffrey Thomas of OMB Watch, a Washington, D.C.-based nonprofit group that follows federal budgetary and regulatory processes.
Bette Hileman
W.R. Grace spurns Hercules takeover bid Two executives publicly exchanged acerbic letters last week in what may be the opening volley of a takeover war for W.R. Grace.
Hercules Chairman Thomas L. Gos-sage—until last week a member of Grace's board of directors—had previously approached Grace Chairman Albert J. Costello about a Hercules bid for Grace. Costello rejected the advance. In a letter, he charged that Gossage was promoting Hercules shareholders' interests at the expense of Grace stock owners. Financial details, if they were discussed, have not been disclosed.
Wall Street analysts now expect a formal offer from Hercules, which has been seeking a sizable acquisition for some time. They speculate that other firms may also bid for Grace. On March 5, the day after disclosure of the executives' letters, Grace shares closed up $9 at $775/& on the New York Stock Exchange.
In 1995, Grace had sales of $3.7 billion from chemicals and $2.1 billion from its National Medical Care (NMC) unit, which is being acquired by Fresenius, a German medical products firm (C&EN, Feb. 12, page 8). Hercules had sales of $2.4 billion.
The acquisition talk comes after a tumultuous year for Grace. The company had begun to steady itself following the death of longtime Chairman J. Peter Grace last April, the resignation of President J. P. Bolduc the same month, a federal probe into NMC's kidney dialysis unit (also the target of a bid from
a Grace board member last May), and an unsolicited bid for NMC from Baxter International in late January.
On March 4, Gossage wrote Costello a "Dear Al" letter resigning from Grace's board. Gossage noted that his merger offer was encouraged by "several large shareholders of Grace and Hercules." A Hercules spokeswoman declined to identify those shareholders. But eight large institutions collectively own 16% of Hercules' shares and 31% of Grace's shares.
1 ι
Gossage: create substantial value for both companies
"Now that Grace is positioned to become a 'pure chemical company,' " Gossage wrote, "these shareholders believe that such a combination could create substantial value for both of our companies." Costello's rejection "without a thorough analysis and discussion of the reasons which support my proposed combination is not, in my opinion, responsive to the best interests of [Grace's] shareholders."
In his "Dear Tom" reply, Costello explained that "There will be a time when
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