Elanco Animal Health, a US provider of innovative solutions for animal health protection and enhancement, has announced its US$7.6 billion acquisition of the animal health business of Bayer AG, a German multinational pharmaceutical and life sciences company. The acquisition advances and adds strength to Elanco’s Innovation, Portfolio, and Productivity (IPP) strategy. In terms of global revenue, it gives birth to the second-biggest company in animal health, according to a recent press release by Elanco. Importantly, it helps Elanco to create a balance between its companion animal and food animal segments. Furthermore, it accelerates the company’s purposeful transformation of its portfolio mix.
“Having secured well-established market positions and built up an attractive portfolio in the farm and companion animal segments, Bayer’s animal health business is among the pioneers of this sector. And now, the combination with Elanco will create a leading competitor in the animal health industry, benefiting shareholders, employees, and customers alike,” said Werner Baumann, CEO of Bayer AG.
Transaction expected to close halfway through the next year
“As an independent company, in its first four quarters, Elanco has validated the remarkable value creation potential from a dedicated focus on a targeted strategy and animal health. Joining Bayer Animal Health and our company accelerates our margin expansion journey, expands innovation, creates increased presence in key emerging markets, transforms our portfolio with the addition of popular pet brands, and accelerates and strengthens our IPP strategy. While meeting changing expectation of pet owners related to pet care and access to products, this move combines our company’s long-standing focus on the veterinarian,” said CEO of Elanco, Jeffrey Simmons.
According to Elanco, the combined company is expected to continue to achieve mid-single digit revenue growth as it delivers adjusted EBITDA margin growth in double digits and advances attainment of adjusted gross margin goals. Subject to customary closing conditions including regulatory approvals, the acquisition is anticipated to see closure in mid-2020.