Elanco to acquire Bayer’s Animal Health business in US$7.6bn deal

21 Aug 2019 --- US-based Elanco Animal Health is to acquire Bayer’s Animal Health business in a US$7.6 billion deal. According to Elanco, the move elevates it as a global animal health company, enhances its portfolio of leading global brands and bolsters its innovation capabilities and R&D pipeline. The combination of portfolios and capabilities hopes to “provide a sustained flow of innovation for farmers, veterinarians and pet owners,” says Jeffrey N. Simmons, President and CEO of Elanco.

Bayer’s Animal Health business is a global leader in the segment with sales of US$1.8 billion in fiscal year 2018. It develops and markets innovative products and solutions to prevent and treat diseases in companion and farm animals. The Advantage family of flea, tick and worm control products, for instance, has been among the most successful products on the market for years. In addition, the innovative Seresto collar is one of the fastest-growing products in this area.

“This transaction enhances our focus as a global leader in life sciences,” says Werner Baumann, Chairman of the Board of Management of Bayer. The exit of the Animal Health business marks the largest transaction in the series of portfolio measures initiated by Bayer in November 2018. The company had previously announced the divestiture of its Consumer Health brands Coppertone and Dr. Scholl’s along with the sale of its 60-percent stake in German site services provider Currenta. 

“We are therefore delivering ahead of schedule on one of the key priorities for driving value creation that we communicated at our Capital Markets Day in December 2018,” says Baumann.

The transaction is valued at US$7.6 billion, consisting of US$5.3 billion in cash, subject to customary purchase price adjustments, and US$2.3 billion in Elanco stock based on the unaffected 30-day volume weighted average price as of August 6, 2019. The divestment is expected to be concluded in mid-2020 subject to the satisfaction of customary closing conditions, including antitrust clearance. Bayer intends to exit its stake in Elanco over time.

Under the agreement with Elanco, all Bayer Animal Health employees will have at least one year of employment protection against unilateral termination with similar benefits in the aggregate.

In further animal health news, Swiss-based Stonehaven Incubate and Nuritas – a discovery platform for active peptides – recently entered into a new partnership agreement. The two companies are joining forces to use cutting-edge AI technology to discover and develop advanced animal health solutions. The initial focus of the partnership will be on exploring animal feed ingredients. 

Edited by Laxmi Haigh

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