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Elanco acquires Bayer’s Animal Health Business

Bayer sells its animal health division to Elanco.

Elanco Animal Health Incorporated has reached an agreement with Bayer to acquire its animal health business. The transaction value is stated at 7.6 billion dollar. The transaction is subject to regulatory approval and other customary closing conditions. With the acquisition Elanco will become the second largest animal health company in the world.


“In our first four quarters as an independent company, we have validated the significant value creation potential from a dedicated focus on animal health and a targeted strategy,” said Jeffrey N. Simmons, president and chief executive officer of Elanco. “Joining Elanco and Bayer Animal Health strengthens and accelerates our strategy, transforms our portfolio with the addition of well-known pet brands, brings an increased presence in key emerging markets, expands innovation, and accelerates our margin expansion journey. The move combines our long-standing focus on the veterinarian while meeting pet owners’ changing expectation of pet care and access to products.”

Bayer AG’s chief executive officer, Werner Baumann, added: “Our Animal Health business is among the pioneers of this sector, having built up an attractive portfolio and secured well-established market positions in the companion and farm animal segments. And now, the combination with Elanco will give rise to a leading competitor in the animal health industry, benefiting customers, employees and shareholders alike.”

“This transaction enhances our focus as a global leader in life sciences,” explained Baumann, chairman of the Board of Management of Bayer. The exit of the Animal Health business marks the largest transaction in the series of portfolio measures initiated by Bayer in November 2018. “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.


The transaction will double Elanco’s Companion Animal business, advancing the company’s intentional portfolio mix transformation and creating a balance between its Food Animal and Companion Animal segments. Elanco expects the combined organization to continue to deliver mid-single digit revenue growth.

“I have tremendous respect for the Bayer Animal Health team and their shared passion for improving the health and well-being of animals,” said Simmons (Elanco). “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.”

In the Food Animal business, the acquisition will add a number of cattle brands, create a bio-protection portfolio and expand Elanco’s aqua presence into warm water fish. “The enhanced global presence will allow Elanco to better serve veterinarians, farmers and pet owners”, says Elanco.


The transaction adds superior capabilities for R&D platforms in key areas along with innovative dosing and delivery technology platforms. The acquisition also adds additional bench strength and scale to Elanco’s R&D team.

“This combination will join two complementary animal health-focused entities previously under the human pharma umbrella into a dedicated company focused on delivering for farmers, veterinarians and pet owners. It creates increased speed, attention and investment to bring customers greater access and options at a variety of price points to make a difference in the lives of animals,” Simmons said. “We look forward to adding Bayer Animal Health’s employees’ breadth of expertise. Ultimately, we believe these increased capabilities and knowledge will allow us to better support the veterinarian, creating a bridge between the pet owner and the veterinarian where relationships don’t exist today.”

Under the agreement with Elanco, all Bayer Animal Health employees will have at least one year of employment protection against unilateral termination with similar and no less favourable benefits in the aggregate.


Elanco will finance the transaction through both cash and equity. Bayer AG will receive $5.32 billion in cash, subject to customary purchase price adjustments, and $2.28 billion or approximately 68 million Elanco Animal Health common shares. This represents a 70 percent to 30 percent cash-to-equity mix.

Bayer intends to withdraws its presence as a major shareholder of Elanco over the next years. The transaction is expected to close in mid-2020, subject to regulatory approvals and other customary closing conditions.

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