Its official: Elanco to purchase Bayer Animal Health
The deal will double Elancos companion animal business, making it the second-largest player in the veterinary pharmaceutical industry.
Elanco Animal Health has entered into a definitive agreement to acquire Bayer Animal Health, the companies announced separately on Tuesday.
The transaction is valued at $7.6 billion, including $5.3 billion to be paid in cash and $2.3 billion in equity. Subject to regulatory approval and other customary closing conditions, the deal is expected to be finalized in mid-2020, according to the press releases.
With its Advantage and Seresto parasiticides, among other products, Bayer Animal Health has been a longtime global leader in the veterinary industry, with sales of $1.8 billion worldwide in fiscal year 2018. The marriage of these companies will give rise to the second-largest animal health company in the world (behind Zoetis), improving Elanco's product portfolio and paving the way for research and innovation, according to the Bayer press release.
“Our Animal Health business is among the pioneers of this sector, having built up an attractive portfolio and secured well-established market positions in the companion and farm animal segments,” said Werner Baumann, chairman of the board of management of Bayer AG, in the Elanco press release. “And now, the combination with Elanco will give rise to a leading competitor in the animal health industry, benefiting customers, employees and shareholders alike.”
Jeffrey N. Simmons, president and CEO of Elanco, agrees. “Combining Elanco's strong relationship with veterinarians and Bayer's leadership in retail and e-commerce will ultimately benefit all our customers,” he said in the Bayer release. “We look forward to joining our complementary portfolios and capabilities to build a fully focused animal health company, providing a sustained flow of innovation for farmers, veterinarians and pet owners.”
The purchase agreement guarantees all Bayer Animal Health employees will retain a position within Elanco for at least one year.