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CHEMICALS | NATION / WORLD

Dow to Buy Lilly's 40% Stake in Dow Elanco

May 16, 1997|(Reuters)

Dow Chemical Co. said it will acquire Eli Lilly & Co.'s 40% stake in their agricultural chemicals joint venture, Dow Elanco, for $900 million plus $300 million in undistributed earnings. The $1.2-billion transaction, a result of Indianapolis-based Lilly's decision to exercise its option to sell its interest, would make Midland, Mich.-based Dow the sole owner of the operation. Indianapolis-based Dow Elanco, which was formed in 1989, has annual sales of about $2 billion and has seen strong growth in sales and profit. The Lilly-Dow deal comes the same week that Merck & Co. agreed to sell its agricultural chemicals unit to Switzerland's Novartis for $910 million. Analysts called the timing of the deals a coincidence, but added that more mergers and acquisitions can be expected in the world agricultural chemicals industry. In New York Stock Exchange trading, Dow Chemical's stock fell $1.125 to close at $87.625; Lilly added 87.5 cents to close at $93.50.

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