German company Bayer AG is selling its animal health department to American rival Elanco for $7.6 billion, according to The Wall Street Journal.
Bayer AG, a drug and chemical giant, is selling assets amid the increasing legal problems surrounding its herbicide Roundup. The sale will turn Elanco, based in Greenfield, Indiana, into a new industry heavyweight. The sale gives Elanco a market share of roughly 13%, making it the second-largest animal-health company. It is surpassed in the animal-health industry by only Zoetis Inc.
Elanco was a division of pharmaceutical company Eli Lilly until they sold a minority stake in Elanco through an IPO. The deal with Bayer AG will double Elanco’s pet business.
Bayer AG got $5.3 billion in cash and retained a stake worth $2.3 billion in Elanco, which it will sell over time. Several private equity firms expressed interest in Bayer's animal health department.