OR WAIT 15 SECS
The divestiture is in line with Bayer’s strategy to focus on its life sciences business.
On Aug. 20, 2019, Bayer announced that it has entered into a definitive agreement with US-based Elanco Animal Health to sell its Animal Health business to Elanco in a transaction valued at $7.6 billion. The purchase price consists of $5.3 billion in cash, subject to customary purchase price adjustments, and $2.3 billion in Elanco stock based on the unaffected 30-day volume weighted average price as of Aug. 6, 2019.
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.
Bayer’s Animal Health business had sales of $1.8 billion in fiscal 2018. It develops and markets innovative products and solutions to prevent and treat diseases in companion and farm animals. The business includes the Advantage family of flea, tick, and worm control products and the Seresto collar, which is one of the fastest-growing products in this area, according to the company.
“This transaction enhances our focus as a global leader in life sciences,” said Werner Baumann, chairman of the board of management of Bayer, in a company press release.
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%-stake in German site services provider Currenta.
“We are therefore delivering ahead of schedule on one of the key priorities for driving value creation that we communicated at our Capital Markets Day in December 2018,” said Baumann in the press release.
The addition of the business complements Elanco’s portfolio and creates the second-leading animal health company with three top positions across a broad range of species and geographies, according to Elanco. It also enhances Elanco’s portfolio of global brands and bolsters its innovation capabilities and R&D pipeline.
“I have tremendous respect for the Bayer Animal Health team and their shared passion for improving the health and well-being of animals,” said Jeffrey N. Simmons, president and CEO of Elanco, in the press release. “Combining Elanco’s strong relationship with veterinarians and Bayer’s leadership in retail and e-commerce will ultimately benefit all our customers. We look forward to joining our complementary portfolios and capabilities to build a fully focused animal health company, providing a sustained flow of innovation for farmers, veterinarians, and pet owners.”
“We would like to thank all our Animal Health employees for the commitment they have shown over the years and for the success this has brought to Bayer and to our Animal Health business. We were also able to safeguard the interests of our employees,” Baumann added in the press release. Under the agreement, all Bayer Animal Health employees will have at least one year of employment protection against unilateral termination with similar and no less favorable benefits in the aggregate.