Elanco to buy Bayer’s animal health unit for $7.6 billion

Elanco to buy Bayer’s animal health unit for $7.6 billion

(Reuters) – Elanco Animal Health (ELAN.N) said on Tuesday it would buy Bayer’s (BAYGn.DE) veterinary drugs unit in a cash and stock deal valued at $7.6 billion, creating the second largest animal health business and expanding Elanco’s reach in the pet e-commerce space.

The animal health market has seen Pfizer Inc (PFE.N) and Eli Lilly and Co (LLY.N) successfully floating their veterinary medicine units on the stock market as independent entities.

The deal is expected to close by mid-2020, Elanco said.

The two companies said Bayer would receive $5.3 billion in cash and $2.3 billion worth of Elanco stock based on the unaffected 30-day average price as of Aug. 6 and subject to a 7.5% symmetrical collar.

The price tag represents an implied multiple of 18.8 times adjusted core earnings, Bayer added.

Reuters reported last month that Bayer had approached former Eli Lilly (LLY.N) unit Elanco to discuss a possible combination that would be number two after industry leader Zoetis (ZTS.N) and ahead of unlisted Boehringer Ingelheim – which bought animal health assets from Sanofi – and drugmaker Merck & Co (MRK.N).



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