Elanco Animal Health has inked a deal to buy Bayer’s veterinary drug unit for U.S. $7.6 billion.
The deal, subject to regulatory approval, will make Elanco the second largest veterinary medicine maker by revenue, an Elanco press release notes. It also strengthens Elanco’s cattle business, doubles its pet business and combines Bayer’s e-commerce and retail focus with Elanco’s veterinary focus, the release adds.
Bayer makes several livestock products, including non-antibiotic and antimicrobial treatments for bovine respiratory disease (BRD) and various insecticides.
“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 Bayer AG’s chief executive officer, Werner Baumann. “And now, the combination with Elanco will give rise to a leading competitor in the animal health industry, benefiting customers, employees and shareholders alike.”
“We look forward to adding Bayer Animal Health’s employees’ breadth of expertise,” said Jeffrey N. Simmons, president and chief executive officer of Elanco. “Ultimately, we believe these increased capabilities and knowledge will allow us to better support the veterinarian, creating a bridge between the pet owner and the veterinarian where relationships don’t exist today.”
The deal also “augments Elanco’s already strong R&D pipeline with eight significant new development projects and 30+ lifecycle products.” It gives Elanco some access rights to Bayer CropScience’s research and development pipeline and “de-prioritized clinical pharma assets.”
Elanco is ponying up $5.32 billion in cash and $2.28 billion in stock (about 68 million Elanco Animal Health common shares) for the purchase. The stock price is based on a price of $33.60 per share as of August 6, 2019.