The merger, which has been rumoured in European stock markets for several weeks, would give birth to the world's biggest pharmaceuticals and agro-chemicals business, with an annual turnover of 80 billion German marks ($ 47 billion), the respected financial daily said. Only the tie-up between the car giants Chrysler and Daimler-Benz is bigger, it said. Handelsblatt said the two merchant banks leading the operation, Lazard Freres for Hoechst and Rothschild for Rhone-Poulenc, have given the two groups a financial breakdown that effectively gives the go-ahead for the merger.

Only lesser details, such as the name of the group, the location of its headquarters and its management, remain to be settled, it said. Hoechst and Rhone-Poulenc have refused to make any comment on thepurported merger.