Elanco, Bayer Are Aiming to Reach Animal-Health Deal Next Week
Companies hope to announce agreement around Elanco earnings
Elanco plans to pay at least part of purchase price in stock
By Riley Griffin, Dinesh Nair, and Nabila Ahmed, Bloomberg
August 7, 2019
Elanco Animal Health Inc., the business Eli Lilly & Co. listed last year, is aiming to reach an agreement as soon as next week to combine with Bayer AG’s animal-health unit, people with knowledge of the matter said.
The companies hope to announce a deal around the time of Elanco’s Aug. 13 earnings release, the people said, asking not to be identified as the discussions are private. Elanco, which has a market value of about $12.3 billion, plans to pay at least part of the acquisition cost using stock, the people said.
Bayer’s American depositary receipts rose, and were up 6.9% to $16.83 at 2:15 p.m. in New York. Elanco shares lost 3.8% to $31.60.
Bayer would get a significant minority stake in Elanco under the deal being discussed, according to another person. The companies are currently hammering out potential antitrust issues by identifying which businesses they will likely need to sell to gain regulatory approval, the person said.
While Bayer prefers a deal with Elanco, no final agreements have been reached and the talks could drag on or fall apart, the people said. Bayer may proceed with its previous plans for a broader auction process if it can’t agree on terms with Elanco by early September, one person said.
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