Elanco Animal Health has entered into an agreement with Bayer AG to acquire its animal health business, in a transaction valued at US$7.6 billion (£6.2bn).
The transaction, which is subject to regulatory approval and other customary closing conditions, will create the second largest animal health leader, while strengthening and accelerating Elanco’s Innovation, Portfolio and Productivity (IPP) strategy.
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.
Jeffrey N. Simmons, president and chief executive of Elanco, said: “In our first four quarters as an independent company, we have validated the significant value creation potential from a dedicated focus on animal health and a targeted strategy.
“Joining Elanco and Bayer Animal Health strengthens and accelerates our IPP strategy, transforms our portfolio with the addition of well-known pet brands, brings an increased presence in key emerging markets, expands innovation, and accelerates our margin expansion journey.”
Bayer AG’s chief executive officer, Werner Baumann, added: “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. And now, the combination with Elanco will give rise to a leading competitor in the animal health industry, benefiting customers, employees and shareholders alike.”