Greenfield-based Elanco Animal Health announced on Aug. 20 that it had agreed to buy the animal-health unit of German pharmaceutical giant Bayer AG for $7.6 billion.
The deal, which is expected to close by mid-2020, will swell Elanco from the world’s fourth-largest animal health player to the second-largest, behind only New Jersey-based Zoetis.
Elanco, which was spun off from Indianapolis-based Eli Lilly and Co. in 2018, said it will pay for the acquisition with $5.3 billion in cash and $2.3 billion in Elanco stock.
“Joining Elanco and Bayer Animal Health … 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,” Elanco CEO Jeff Simmons said in a statement.
Bayer had been under pressure to divest assets and raise cash since buying St. Louis-based Monsanto Co. for $63 billion last year. In 2018, Bayer CEO Werner Baumann said the company would seek to sell its animal-health division, which has a diverse product line, including its best-selling Advantage flea, tick and worm treatment for small animals.
Elanco has grown rapidly through at least 10 acquisitions since 2007. It had 2018 sales of $3.1 billion and has a stock market value of $11.1 billion. Elanco has more than 5,000 employees worldwide, including more than 800 in Greenfield.