Lilly to Acquire Novartis Animal Health

Eli Lilly and Company will acquire Novartis Animal Health for approximately $5.4 billion in an all-cash transaction that will expand Lilly's animal health business, Elanco. Upon completion of the acquisition,Elanco will be the second-largest animal health company in terms of global revenue. Lilly will acquire Novartis Animal Health's nine manufacturing sites, six research and development facilities, a portfolio of approximately 600 products, a pipeline with more than 40 projects in development, and over 3000 employees.

Lilly plans to fund this acquisition with approximately $3.4 billion of cash-on-hand and $2 billion in debt to be issued. No other financial terms of the transaction are being disclosed. The transaction is expected to close by the end of the first quarter of 2015, subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, similar requirements outside the US, and other customary closing conditions. The transaction is not subject to any financing conditions.

With this acquisition, Lilly expects to save an estimated $200 million per year within the first three years of the deal closing, adding up to more than 10% of operating expenses from the combined animal health businesses.

The acquisition will expand Elanco's product portfolio, R&D and manufacturing capabilities, and commercial presence. In addition, Elanco will have a greater presence in the animal and swine markets, the equine and vaccines areas, and the aquaculture market.

Source: Eli Lilly and Company