Elanco Animal Health Incorporated (NYSE: ELAN) today announced that the European Commission (EC) has granted approval of Elanco’s pending acquisition of Bayer AG’s (ETR: BAYN) animal health business. The company continues to progress toward a mid-year closing, anticipated August 3, 2020.
“Approval from the European Commission is an important milestone toward the completion of our acquisition of Bayer Animal Health,” said Jeff Simmons, president and CEO of Elanco.
“As the transaction edges closer to fruition, we look forward to turning our full attention to delivering innovation and an expanded portfolio of solutions for farmers, veterinarians and pet owners across the globe. The recent months have only underscored the critical work our farmers do in delivering meat, milk, fish and eggs, and the importance of providing pet owners and veterinarians with a variety of solutions in multiple channels from telemedicine and e-commerce to direct home delivery. Combining Bayer Animal Health’s leadership in these areas better positions Elanco to deliver on these needs,” said Simmons.
The complementary nature of this transaction, combining Elanco’s long-standing focus on the veterinarian with Bayer’s direct-to-consumer expertise, will strengthen and accelerate the company’s Innovation, Portfolio and Productivity strategy.
The transaction advances Elanco’s portfolio transformation, creating a balance between the farm animal and pet businesses. It will also expand Elanco’s omnichannel approach, substantially diversifying its pet health business into the retail and e-commerce channels as Elanco continues to determine the best methods for reaching pet owners and veterinarians.
Elanco previously announced divestiture agreements in the range of $120 million to $140 million of revenue to help advance the needed regulatory reviews. The EC’s approval is conditional on several of these proposed divestitures, including:
Divestiture of the worldwide rights for Osurnia, a treatment for otitis externa in dogs, being sold to Dechra Pharmaceuticals PLC (LON: DPH)
Divestiture of the worldwide rights for Vecoxan, used for prevention and treatment of coccidiosis in calves and lambs being sold to Merck Animal Health (also known as MSD Animal Health).
Divestiture of European Economic Area and UK rights to the Drontal and Profender product families and related pipeline assets from Bayer Animal Health being sold to Vetoquinol SA (EURONEXT: VETO), a French pharmaceutical company. These products are broad-spectrum de-wormers for dogs and cats.
In addition to EC approval, Elanco has received antitrust clearance for the transaction in China, Colombia, South Africa, Turkey, Ukraine, Vietnam, and provisional clearance in Brazil. Elanco continues to cooperate with agencies in other jurisdictions. Further, Elanco fully secured financing early in the first quarter of 2020 to complete the transaction through its completed equity issuance and pricing of its Term Loan B, which will fund at deal close.
The transaction remains subject to additional regulatory approvals and customary closing conditions.