Eli Lilly To Acquire Novartis Animal Health Business
Eli Lilly & Co. announced that it has entered into an agreement to acquire Novartis Animal Health for approximately $5.4 billion. The transaction will make Elanco, Lilly’s own animal health business, the second largest animal health company in terms of global revenue.
Novartis Animal Health had an approximately $1.1 billion revenue in 2013. The business is focused on development of prophylaxis and treatments of diseases in pets, farm animals, and farmed fish. Lilly will acquire nine manufacturing sites, six dedicated R&D facilities, a portfolio of about 600 products, a pipeline with over 40 projects in development, and more than 3,000 employees.
John C. Lechleiter, Lilly's chairman, president and CEO, said, “Animal health continues to represent an attractive growth opportunity for Lilly. We intend to keep Elanco and to take advantage of the substantial synergies between our animal health and human health businesses. Significant investments in our animal health business in recent years have enabled Elanco to double its revenue since 2008, leading the industry in growth. Global trends suggest continued sustained demand for animal health products in the years ahead. Through this acquisition, which moves Elanco to top-tier in the industry, we intend to create value for our shareholders by adding to our promising pipeline of innovative animal health assets, increasing sales through a larger commercial footprint, and improving efficiencies and lowering costs.”
The acquisition will be an all-cash transaction and is expected to diversify Elanco. Concurrent with its transaction with Eli Lilly, Novartis also announced divestment of its vaccines business to GlaxoSmithKline.
Joseph Jimenez, CEO of Novartis, said, “Lilly emerged from our competitive process as the clear best buyer for Novartis Animal Health and a good home for our employees. We look forward to a smooth transition of the business over the next several quarters.” The transaction is expected to be completed by the end of the first quarter of 2015.