Global health company Bayer has entered into a definitive agreement to sell its animal health business for $US7.6 billion.
Bayer Animal Health is being bought by US-based company Elanco Animal Health, the companies announced last week. The transaction consists of $US5.3 billion in cash, and $US2.3 billion worth of Elanco stock. 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.
The transaction will double Elanco’s Companion Animal business, advancing the company’s intentional portfolio mix transformation and creating a balance between its Food Animal and Companion Animal segments.
As well as veterinary products, Bayer’s equine range includes dewormers, skincare and vitamins.
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.
“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. “This transaction enhances our focus as a global leader in life sciences.”
Jeffrey N. Simmons, president and chief executive officer of Elanco, said the company looked forward to building a fully focused animal health company, “providing a sustained flow of innovation for farmers, veterinarians and pet owners”.
He continued: “We look forward to adding Bayer Animal Health’s employees’ breadth of expertise. 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.”
Bayer’s Animal Health business is a global leader in the segment with sales of $US1.8 billion in 2018.