for energy efficiency equipment and services is likely to grow by $250 billion during the 1990s, and that this represents a great opportunity for U.S. companies. In the past month, EPA's Office of Research & Development has begun two new programs to implement pledges on biodiversity the Administration made in Rio. One is to establish a domestic biodiversity center to act as a clearinghouse for information on species now housed in many offices, private and public, all over the U.S. The second project is to establish an international survey and data organization plan to be used by all countries that are setting up centers to collect biodiversity information. Data standardization is an important issue. When Reilly's memo to EPA employees was made public, some observers speculated he felt free to criticize the Administration because he intended to resign. Now, however, most believe he wants to keep his post. For example, Daniel A. Lashof, senior scientist at the Natural Resources Defense Council, comments: 'The memo is an honest assessment of what happened. Although it can obviously be read to undennine the Administration stance, Reilly is also saying the Administration's record is better than they let themselves get credit for. It shows he hasn't given up fighting those guys in the White House who have tried to cut him off." Bette Hileman
ICI splitup proposal comes as no surprise The announcement two weeks ago by British chemical producer ICI that it is "considering" splitting itself in two was unexpected in its timing (C&EN, Aug. 3, page 15). But such a proposal did not come as a surprise. The door was opened at least five years ago, when ICI organized its chemicals and plastics operations into a separate unit. More recent reorganizations continued to emphasize the company's attempts to define the different types of businesses it is in—types that ultimately have been clarified as biosciences and basic chemicals. Stock market analysts agree that a wide variety of problems surround ICI's proposed move. It would be the largest such splitup in the global chem-
ical industry: ICI's $22.1 billion in sales far outweighs the combined $7.4 billion of Union Carbide and its new offshoot Praxair, for example. Nonetheless, analysts firmly expect ICI to put the proposal into effect in early 1993, with the division taking place, for accounting purposes, on Jan. 1,1993. Under the proposed scheme, two companies—ICI and ICI Bioscience (ICI Bio)—would emerge. ICI would include paints, formed plastics, industrial chemicals, explosives, and surfactants. Its sales in 1991 would have been $15.4 billion, with operating profits of $554 million and 88,100 employees. ICI Bio would consist of pharmaceuticals, agrochemicals and seeds, and various specialty chemicals. Sales last year would have been $6.9 billion, with operating profits of $1.27 billion and 35,500 employees. "Each group would have different characteristics and would be free to de-. velop its strengths in ways in which management judges most appropriate," says ICI chairman Sir Denys Henderson. Henderson, 59, would continue as chairman of both companies. Ronnie C. Hampel, 60, now chief operating officer of ICI, would be deputy chairman and chief executive of the new ICI. David Barnes, 56, an ICI executive director, would be chief executive of ICI Bio. A major example of such a splitup in U.K. industry—but on a much smaller scale—is Courtaulds, which broke itself into a textiles company and a producer of specialty materials and coatings. As securities analyst Jeremy Chantry of London stockbroker Kleinwort Benson observes, "It wasn't too long after that demerger before the market capitalization of the two was greater than before. ICI hopes this will have the same effect." Tony Church of London stockbroker Wetheim Schroder agrees that the proposal "is an ideal way to increase shareholder value." Such splitting up is forced on companies, he believes, because their managements reach the point where they can't balance the demands of the two different kinds of businesses. The message is, he says, that ICI "can't balance the cash requirements for the biosciences group with the cyclical nature of the other." But Church has a nagging concern about the splitup: "Drugs at ICI are the jewel in the crown. But in the pharmaceutical industry, it is not an important
company. The reason you want to be big in drugs is to fund R&D. A cyclical chemicals business that throws off tons of cash at the top of the cycle is one way to fund a business." But clearly, the bottom of the cycle the chemical industry is in finally convinced ICI to step through the door that opened five years ago. Patricia Layman
Monsanto to sell Fisher Controls subsidiary Monsanto announced last week that it plans to sell its Fisher Controls International subsidiary to Emerson Electric, also based in St. Louis. The two companies have signed an agreement under which Emerson will purchase Fisher's worldwide business for $1.28 billion. Monsanto says the transaction has been approved by the boards of directors of both firms, and is expected to close as soon as practicable. Fisher Controls is a worldwide supplier of control valves and control systems for process industries, including chemicals, oil and gas, and pulp and paper. It had 1991 sales of $928 million. Emerson Electric produces electrical, electronic, and other products for consumer, commercial, and industrial markets, and had fiscal year 1991 sales of $7.4 billion. Monsanto's sale of Fisher comes as no surprise. It has long been rumored on Wall Street—but denied by Monsanto— that the unit was for sale. With Fisher's earnings contributions historically low, analysts essentially have thought of it as the weak sister in the Monsanto family. And Fisher was never viewed as fitting particularly well with the parent company's main businesses, an assessment Monsanto now shares. In the past five years, for instance, its operating profit margins have been well below those of Monsanto. Analysts seem to favor Monsanto's move partly because if s getting rid of Fisher, and partly because they expect Monsanto to use the proceeds of the sale to buy back its own stock. On the day the transaction was disclosed, Monsanto was one of the 10 most active stocks on the New York Stock Exchange, with its share price climbing $3V4, or 6%, to $56%. At the same time, the stock of Emerson Electric slipped $lVè per share, or 2%, to close at $50. William Storck AUGUST 10,1992 C&EN
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