June 9, 2020

Elanco announces target date for closing Bayer deal

Elanco Animal Health has announced that it will complete its acquisition of Bayer Animal Health on August 3, the company stated in a Monday release, Kansas City Business Journal reported.

The European Commission has approved the purchase while US approval from the Federal Trade Commission is still pending.

Although neither company is based in Kansas City, the US$7.6 billion transaction is a big deal for the area. Bayer Animal Health's North American headquarters is in Shawnee, and Elanco has built its area presence through deals like its US$245 million purchase of Aratana Therapeutics Inc. in 2019. Together, the companies had roughly 650 area employees last year.

Elanco, based in the Indianapolis suburb of Greenfield, has portrayed its purchase of the Bayer AG unit as combining complementary operations. Elanco, which completed its spinoff from Eli Lilly and Co. last year, has a strong presence in the food-animal market and sells most of its products through the veterinary market. Bayer Animal Health also has a line-up of products for farm animals but brings direct-to-consumer expertise from the sale of products like Advantage, Advantix and Seresto for dogs and cats.

Elanco has been preparing for the merger, including an April announcement that it would add Joyce Lee, head of Bayer Animal Health's North American operations, to its executive team. However, the company has not yet announced plans for Bayer Animal Health's Shawnee employees or facilities.

The European Commission cleared the deal from an antitrust standpoint. It is conditioned on divestitures of product rights valued at US$120 million to US$140 million. The deal also has received antitrust clearance from China, Columbia, South Africa, Turkey, Ukraine, Vietnam and provisional approval in Brazil, according to a release.