Elanco Animal Health has closed its $6.89 billion acquisition of Bayer’s Animal Health business unit, with all the necessary global regulatory approvals and consequent portfolio adjustments in place.
The deal was first announced in August 2019 – the Bayer Group is divesting the asset as part of its drive to raise the funds to meet the $10 billion plus it has pledged to settle glyphosate litigation, a legacy of its 2017 acquisition of Monsanto.
Elanco and Bayer are the fourth and fifth largest world animal health businesses ranked on 2019 revenues with respective revenues of $3.07 billion and $1.76bn. The combined business will be in second place in the global league table ahead of Merck Animal Health ($4.39bn) and Boehringer Ingelheim ($4.52bn) but behind global market leader Zoetis ($6.6bn).
Elanco was the animal health division of Eli Lilly & Company, until its IPO in March 2019.
The company said that the Covid-19 pandemic has “accelerated key trends transforming the industry, particularly pet owners’ desire to access veterinary care and animal health products in a
variety of forms, from curbside care and telemedicine to online purchases shipped direct to the doorstep”.
For farm animal health and welfare, the combination brings together complementary production animal portfolios that will enable Elanco to serve an even broader spectrum of the industry with better leverage of data and services for farm customers. Elanco gains a number of anchor cattle brands, enhances its global bio-protection portfolio and expands its aquaculture presence.
It added that the combination of Elanco’s strong relationship with veterinarians with Bayer’s expertise in retail and online sales creates an “omni-channel leader best positioned to serve veterinarians and pet owners where they want to shop”.
“Nearly two years into our journey as an independent company, we have made significant progress in creating a purpose-driven, independent global company dedicated to animal health – all while weathering the century’s most significant animal and human health pandemics: African Swine Fever and COVID-19,” commented Jeff Simmons, Elanco president and chief executive. “Delivering on the timely close of the acquisition and bringing momentum into Day 1 in this challenging environment underscores the deep capability and disciplined execution from both companies.”
“Pets and protein have never been more important,” he continued. “Food supply disruptions and increasing unemployment are driving food security challenges around the world. At the same time, research shows increased time at home has changed the long-term relationship between pets and their owners, as pets increasingly provide valuable emotional support. We know making life better for animals, simply makes life better.”