By MICHELE F. MIHALJEVICH

Indiana Correspondent

GREENFIELD, Ind. — Elanco Animal Health, Inc. has agreed to buy Bayer AG’s animal health business for $7.6 billion in cash and stock, the companies announced August 20. The deal is expected to close in mid-2020, pending regulatory approval.

The purchase will make Elanco the second-largest animal health leader by global revenue, the company noted. Elanco was previously a part of Eli Lilly and Co. but separated from Lilly earlier this year.

“In our first four quarters as an independent company, we have validated the significant value creation potential from a dedicated focus on animal health and a targeted strategy,” said Jeffrey N. Simmons, Elanco’s president and CEO.

“Joining Elanco and Bayer Animal Health strengthens and accelerates our IPP strategy, 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. The move combines our longstanding focus on the veterinarian while meeting pet owners’ changing expectation of pet care and access to products.”

Elanco manufactures products designed to prevent and treat disease in food animals and pets, and has more than 5,800 workers. Bayer focuses on the life science fields of health care and nutrition, and employs about 117,000 worldwide.

Elanco has been a great corporate citizen in the state, said Bruce Kettler, director of the Indiana State Department of Agriculture. “(The sale) allows Elanco to diversify their business,” he noted. “This will give them more balance between their pet and animal health businesses.

“From a research and development standpoint, the bringing together of two R&D organizations is a positive. The combination could spur new innovations.”

Elanco’s presence in the state helps bolster the work of organizations such as AgriNovus Indiana (charged with promoting and accelerating the growth of agbioscience in the state), Kettler said. “These organizations are helping all agriculture because companies understand we’re open for business.”

The deal will combine two complementary animal health-focused entities previously under the human pharma umbrella into a dedicated company focused on delivering for farmers, veterinarians, and pet owners, Simmons said.

“It creates increased speed, attention, and investment to bring customers greater access and options at a variety of price points to make a difference in the lives of animals,” he added. “Combining Elanco’s strong relationship with veterinarians and Bayer’s leadership in retail and e-commerce will ultimately benefit all our customers.

“We look forward to joining our complementary portfolios and capabilities to build a fully focused animal health company, providing a sustained flow of innovation for farmers, veterinarians, and pet owners.”

The deal enhances Bayer’s focus as a global leader in life sciences, said Werner Baumann, chair of Bayer’s board of management. Earlier this year, Bayer announced the sales of its Coppertone and Dr. Scholl’s brands.

“We would like to thank all our Animal Health employees for the commitment they have shown over the years and for the success this has brought Bayer and to our Animal Health business,” he said. “We were also able to safeguard the interests of our employees.”

The sale agreement calls for all Bayer Animal Health workers to have at least one year of employment protection against unilateral termination with similar and no less favorable benefits in the aggregate, Bayer stated.