Indiana-based Elanco completed their acquisition of Bayer Animal Health on Monday. They announced their intentions to acquire Bayer Animal Health in August of 2019. The deal is valued at $6.9 billion.
“Nearly two years into our journey as an independent company, we have made significant progress in creating a purpose-driven, independent global company dedicated to animal health – all while weathering the century’s most significant animal and human health pandemics: African Swine Fever and COVID-19,” said Jeff Simmons, president and CEO of Elanco. “Delivering on the timely close of the acquisition and bringing momentum into Day 1 in this challenging environment underscores the deep capability and disciplined execution from both companies.”
“This milestone is another key step in Elanco’s journey. But, ultimately, today is about improving the lives of animals, people and improving the health of the planet. Pets and protein have never been more important,” Simmons said. “Food supply disruptions and increasing unemployment are driving food security challenges around the world. At the same time, research shows increased time at home has changed the long-term relationship between pets and their owners, as pets increasingly provide valuable emotional support. We know making life better for animals, simply makes life better.”
The combined company brings together complementary farm animal portfolios that position Elanco to serve an even broader spectrum of the industry and better leverage data, and services for customers. The transaction adds a number of anchor cattle brands, enhances the company’s global bio-protection portfolio, and expands the company’s aqua presence into warm water fish.
Elanco plans to leverage its extensive integration experience – and ownership mindset – to efficiently and quickly integrate the new business. The combined company is expected to generate significant operating cash flow as a result of the durable industry and resilient portfolios. While the timing of achieving goals from the deal announcement have been impacted by the COVID-19 pandemic, the company still expects to deliver $275 – $300 million in synergies by 2025.
“Most importantly, today is about the farmers, veterinarians, and pet owners we serve. If COVID-19 has made anything clear – it’s that the world has never needed animals and the work farmers and veterinarians do more,” Simmons said. “Together, we are better positioned to advocate for our customers, to deliver solutions to their greatest unmet needs, so they can keep healthy, sustainably sourced meat, milk, fish and eggs in the center of the dinner table and healthy, active pets in the center of families. Together, we have the potential to improve animal health and the lives of billions.”
Simmons also says innovation will improve now that the two companies are one. Between now and 2024, Simmons expects 25 new products to come out of their pipeline, with many of those focused on animal agriculture.