Elanco to Acquire Bayer’s Animal Health Business for $7.6 Billion, Becoming World’s Second-Largest Animal Health Company

On August 21, 2019, VCBeat (WeChat ID: vcbeat) learned from foreign media reports that Elanco Animal Health (Elanco) announced the acquisition of Bayer’s animal health business for $7.6 billion. Upon completion of the acquisition, Bayer will receive $5.32 billion in cash and $2.28 billion worth of Elanco common stock. The transaction is expected to be completed by mid-2020.

This acquisition will help Elanco expand its scale and product market, drive the development of its animal health business, and position it as the second-largest animal health company globally. Upon completion of the transaction, Elanco will accelerate the development and production of its eight animal health projects and more than 30 life sciences-related products.

Under the transaction agreement, all employees in Bayer’s Animal Health division will receive one-year job protection. Meanwhile, Elanco will provide certain resources and technology to support Bayer’s CropScience R&D platform and clinical pharmaceutical research. Reportedly, this divestiture of the animal health business is the largest transaction in a series of divestitures and acquisitions initiated by Bayer in November 2018.

Bayer, founded in 1863 and headquartered in Leverkusen, Germany, is a leader in the life sciences and pharmaceutical industries. As a globally leading multinational corporation, Bayer possesses core competencies in healthcare, biotechnology, and pharmaceuticals. The company is committed to developing products through innovative technologies to meet patients' medical needs and promote the sustainable development of the pharmaceutical industry. In 2018, Bayer employed hundreds of thousands of staff worldwide, invested approximately €5.2 billion in research and development, and achieved total annual sales of €39.6 billion.

Bayer operates 750 production facilities across 200 countries and regions worldwide, offering more than 10,000 products that span pharmaceuticals, medical devices, consumer health, crop science, and animal health.

Bayer Animal Health is a global leader in the field, with sales of approximately $1.8 billion in 2018. The division primarily focuses on developing and marketing innovative products for pets and farm animals to prevent and treat animal diseases. For example, Bayer developed the Advantage product line to control fleas, ticks, and worms that may cause disease. In addition, the innovative Seresto collar for cats and dogs has also achieved significant success.

Elanco, founded in 1954 and headquartered in Indiana, USA, is an international animal health company. The company provides products to veterinarians and animal protein producers in more than 90 countries worldwide to help prevent and treat diseases in animals. Elanco’s mission is to improve animal health to drive the healthy development of the planet and all humanity. The company was listed on the New York Stock Exchange in September 2018 under the ticker symbol ELAN.

Elanco President and CEO Jeffrey N. Simmons stated, “I have great respect for the Bayer Animal Health team and appreciate their passion for advancing animal health. We believe that combining Elanco’s presence in the animal health market with Bayer’s advanced product research and development capabilities will deliver superior products to farmers, veterinarians, and pet owners.”

Werner Baumann, Chairman of the Board of Management of Bayer, stated: “This transaction solidifies our position as a global leader in the life sciences sector. Bayer will continue to drive the development of the pharmaceutical industry and create value for the market.”

(Compiled by Xu Xiaoxue)