Elanco Animal Health Incorporated (NYSE: ELAN), a global animal health company, entered into an agreement with Bayer AG (ETR: BAYN) to acquire its animal health business in a transaction valued at US$7.6 billion.
Elanco will finance the transaction through both cash and equity. Bayer AG will receive $5.32 billion in cash, subject to customary purchase price adjustments, and $2.28 billion or approximately 68 million Elanco Animal Health common shares.
The transaction, which is subject to regulatory approval and other customary closing conditions:
– strengthens the company’s proven Innovation, Portfolio and Productivity (IPP) strategy,
– continues its mid-single digit revenue growth,
– accelerates achievement of adjusted EBITDA and gross margin goals,
– creates synergies,
– doubles pet business with brands balancing Food Animal/Companion Animal mix,
– combines its veterinary focus with Bayer’s e-commerce and retail leadership for full channel coverage,
– enhances emerging market presence,
– strengthens cattle business, and
– expands innovation through pipeline, delivery platforms, scale and access to Bayer R&D.
Led by Jeffrey N. Simmons, president and chief executive officer, Elanco develops products and knowledge services to prevent and treat disease in food animals and pets in more than 90 countries.
The company has more than 5,800 employees.