SANDOZ PHARMACEUTICALS IS LIKELY TO EMERGE AS AUTONOMOUS
SANDOZ PHARMACEUTICALS IS LIKELY TO EMERGE AS AUTONOMOUS worldwide business, according to the brief outline of a worldwide corporate restructuring announced by the Swiss firm April 27 in Basle. Sandoz, Ltd. CEO Marc Moret said beginning Jan. 1, 1990 "the present Chemicals, Pharmaceuticals, Agro and Seeds divisions of the parent . . . will be reconstituted as autonomous corporate entities. Group functions and head office administration will also be reorganized, i.e. integrated into the divisional companies or a management company." The re-organization of Sandoz worldwide operations appears to be designed to untangle the current overlapping geographic and product area orientations. For example, the U.S. pharmaceutical operations in Hanover, N.J. now have two competing reporting routes. The domestic drug business is technically part of Sandoz Corp., the U.S. holding company for a wide variety of businesses. However, the U.S. drug business also has a product area orientation to the worldwide pharmaceuticals business. The company maintains a direct link to worldwide pharmaceutical operations through Max Link, who has headed the Sandoz Ltd. executive board's pharmaceutical functions in Switzerland since September 1987. Link previously served as the president of Sandoz Pharmaceuticals U.S. in 1984-85. Among the other parts of Sandoz' U.S. presence currently under the Sandoz Corp. umbrella are holdings in Dallas-based Zoecon, Sandoz Nutrition (Ovaltine, Optifast and candies), Northrup King (both in Minnesota), Master Builders (Cleveland), Rogers Brothers Seed in Idaho and Sandoz Crop Protection in Illinois. The labyrinthine nature of the firm's U.S. businesses is repeated globally. Sandoz Ltd. had 167 affiliated companies, joint ventures and other holdings in 52 countries, including the U.S.S.R. at the end of 1987, according to the 1987 annual report. A U.S. spokesman for the firm declined to comment or try to explain reporting patterns. The restructure plan calls for Sandoz Ltd. to act as a holding company for the newly-created autonomous units. The change will not affect Sandoz shareholder and certificate owners, who will become stockholders in the holding company. Commenting on the new structure, Moret said: "For the personnel of Sandoz Ltd . . . the new group structure will involve a number of changes. The conversion of divisions with their plants and of certain functions into autonomous corporate entities means that most of them will be working in a new Sandoz company after 1 January 1990." Moret also announced that shareholders will vote May 10 on a proposals to strengthen the company's ability to "protect Sandoz against speculative takeover bids." One proposal would require a three-quarters majority approval of any changes to the Article of Association on the acquisition of registered shares. Another proposal would change the number of board members and their terms of office. First quarter sales passed Swiss Franc (SFr) 3.3 bil., up 32% from the comparable period a year ago, Sandoz announced April 27. Pharmaceutical revenues gained 21% in local currency and were 31% higher in Swiss francs. Net profits jumped 21% to SFr 761 mil.
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