Bayer Agrees to Sell Animal Health Business to Elanco for $7.6 Billion
Bayer has agreed to sell its animal health business to Elanco Animal Health, the former animal health business of Eli Lilly and Company, for a transaction value of $7.6 billion. Elanco Animal Health became a fully independent company earlier this year (March 2019).
Under the agreement, the transaction 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 prices as of August 6, 2019. Bayer’s animal health business had sales of $1.8 billion in fiscal 2018.
Bayer says the divestment is expected to be concluded in mid-2020 subject to the satisfaction of customary closing conditions, including antitrust clearance. Bayer says it intends to exit its stake in Elanco over time.
Bayer’s exit of its animal-health business marks the largest transaction in a series of portfolio measures initiated by Bayer in November 2018. Those portfolio adjustments followed the closing of Bayer’s approximate $63-billion acquisition on Monsanto, an agrochemical and seed company, in June 2018. Bayer had previously announced the divestiture of its consumer health brands Coppertone and Dr. Scholl’s, along with the sale of its 60% stake in the German site services provider, Currenta.
Bayer says 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.