German pharmaceutical company Bayer will sell off its animal health business to a US company for $7.6 billion (€6.8 billion).
Elanco Animal Health, based in the US state of Indiana, will now become the world’s second-largest company for livestock and pet health, in terms of revenue.
In a statement, Bayer said that exiting the animal health business “completes the series of portfolio measures initiated by Bayer in November 2018”, and “enhances Bayer’s focus as a global leader in life sciences”.
US-based company Elanco Animal Health has entered into a definitive agreement to acquire Bayer’s animal health business.
The transaction is expected to be completed by mid-2020, subject to legal clearance. A portion of the sale price will go to buying stock in Elanco. Bayer said it intends to exit its stake in the US company over time.
“This transaction enhances our focus as a global leader in life sciences. The exit of the animal health business marks the largest transaction in the series of portfolio measures initiated by Bayer in November 2018,” said Werner Baumann, chairman of the Board of Management of Bayer.
“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,” added Baumann.
“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.
“Combining Elanco’s strong relationship with veterinarians and Bayer’s leadership in retail and e-commerce will ultimately benefit all our customers,” he added.
Under the agreement, all Bayer employees involved in this division will have at least a year of employment protection against unilateral termination, with “similar or no less favourable benefits in the aggregate”.