Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
  1. Homepage
  2. Equities
  3. Germany
  4. Xetra
  5. Bayer AG
  6. News
  7. Summary
    BAYN   DE000BAY0017


SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Elanco to become No.2 in animal health with $7.6 billion Bayer deal

08/20/2019 | 11:07am EDT
FILE PHOTO: Elanco Animal Health Inc. President and CEO Jeff Simmons, speaks during an interview  at the New York Stock Exchange (NYSE) in New York

(Reuters) - Elanco Animal Health agreed to buy Bayer's veterinary drugs unit on Tuesday in a cash and stock deal valued at $7.6 billion (£6.3 billion), creating the second largest maker of medicines for pets and livestock and expanding Elanco's reach online.

The deal is the latest in the fast-growing animal health market, which has recently seen Elanco floated by Eli Lilly and Co and rival U.S. drugmaker Pfizer also spinning off its veterinary medicine business.

It also adds to the list of assets sold by Bayer, as the German company looks to slash debt from its $63 billion takeover of seed maker Monsanto last year and as it braces for a potential settlement of lawsuits over an alleged cancer-causing effect of weedkiller Roundup.

The two companies said Bayer would receive $5.3 billion in cash and $2.3 billion worth of Elanco stock based on a price of $33.60 per share, the 30-day average price as of Aug. 6.

Elanco said the stock amounted to 68 million shares, or a stake of about 18.2% based on Refinitiv data, but the number of shares could rise or fall by as much as 7.5%, depending on Elanco's share price performance on the closing date.

Refinitiv data on 373 million outstanding shares does not yet take into account the dilutive effect from an as-yet unspecified capital increase that Elanco plans to carry out.

The price tag for the deal implies a multiple of 18.8 times adjusted core earnings, Bayer said, adding it would sell the equity stake over time.

Reuters reported last month that Bayer had approached Elanco to discuss a possible combination that would be number two after industry leader Zoetis and ahead of unlisted Boehringer Ingelheim - which bought animal health assets from Sanofi - and drugmaker Merck & Co.

Market researchers expect the $44 billion animal health sector to grow 5%-6% per year, driven by an increase in livestock farming and, more importantly, by more people wanting to own pets and spending more money on their wellbeing.


Bayer is the world's largest maker of flea and tick control products for cats and dogs, with Elanco praising its "top presence on Amazon" with "industry-leading e-commerce/retail capabilities."

"The move combines our long-standing focus on the veterinarian, while meeting pet owners’ changing expectation of pet care and access to products," said Elanco CEO Jeffrey Simmons.

Elanco said it planned to fund the cash payout to Bayer with a combination of new debt and equity, with the size of the equity capital increase depending on future market developments.

Its shares were down 6.7% at $27.81 at 1430 GMT, while Bayer shares were unchanged.

Bayer has recently sold its 60% stake in a chemical park operator as well as consumer health brands Dr. Scholl's and Coppertone, with combined proceeds of close to 2.4 billion euros ($2.7 billion).

Credit rating agency Moody’s said the Elanco deal would improve Bayer's ability to reduce its debt load and shoulder an expected settlement of the Roundup cases. S&P and Fitch, in turn, flagged the risk of a credit rating downgrade for Elanco.

Equity analysts at Citi said Bayer sold near the top of the price range the brokerage had projected. It expects Bayer to buy back 3 billion euros worth of its own shares in 2020 to offset lower earnings per share from the divestments, with the remainder of the proceeds used to speed up debt payments.

Analysts have put the likely Roundup settlements at $5-$10 billion, with many saying the share price reflects exaggerated market expectations of a $20-$25 billion hit. Bayer strongly denies a carcinogenic effect from using Roundup.

Elanco said it expected the transaction to close by the middle of 2020.

(Additional reporting by Aakash Jagadeesh Babu, Kanishka Singh and Saumya Sibi Joseph in Bengaluru, Editing by Michelle Martin and Mark Potter)

By Ludwig Burger

ę Reuters 2019
Stocks mentioned in the article
ChangeLast1st jan.
BAYER AG 0.14% 50.52 Delayed Quote.4.91%
BYD COMPANY LIMITED 3.43% 211 End-of-day quote.3.84%
MERCK & CO., INC. 0.62% 78.33 Delayed Quote.-4.83%
SANOFI 0.54% 87.59 Real-time Quote.11.30%
All news about BAYER AG
06:29aBAYER : Considers Appealing Against US Legal Case Over Polychlorinated Biphenyl ..
05:19aBAYER : says to appeal U.S. court ruling on PCBs if necessary
07/27Blast in German industrial park kills two, several missing
07/27Bayer Appoints Prof. Dr. Dominik Ruettinger as the New Head of Research and E..
07/27BAYER AG : JP Morgan reiterates its Buy rating
07/27BAYER AG : Gets a Buy rating from Berenberg
07/26PRESS RELEASE : BioNTech Provides Update on Plans to Develop Sustainable Solutio..
07/23PRESS RELEASE : Pfizer And BioNTech to Supply U.S. -2-
07/23Once its strength, water now threatens Germany
07/22SENSYNE HEALTH : Creates Chief Scientific Officer Post to Expand Ethical AI Rese..
More news
Sales 2021 41 461 M 49 098 M 49 098 M
Net income 2021 3 600 M 4 264 M 4 264 M
Net Debt 2021 38 636 M 45 752 M 45 752 M
P/E ratio 2021 14,7x
Yield 2021 4,02%
Capitalization 49 632 M 58 597 M 58 774 M
EV / Sales 2021 2,13x
EV / Sales 2022 2,01x
Nbr of Employees 99 329
Free-Float 100,0%
Duration : Period :
Bayer AG Technical Analysis Chart | BAYN | DE000BAY0017 | MarketScreener
Technical analysis trends BAYER AG
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 27
Last Close Price 50,52 €
Average target price 64,79 €
Spread / Average Target 28,2%
EPS Revisions
Managers and Directors
Werner Baumann Chairman-Management Board
Wolfgang U. Nickl Chief Financial Officer
Norbert Winkeljohann Chairman-Supervisory Board
Bijoy Sagar Chief Information Technology Officer
Paul Achleitner Member-Supervisory Board
Sector and Competitors
1st jan.Capi. (M$)
BAYER AG4.91%58 648
JOHNSON & JOHNSON9.71%454 682
ROCHE HOLDING AG11.50%329 752
PFIZER, INC.14.37%235 663
NOVARTIS AG-0.44%221 987