Following a strategic review of assets, Novartis announced yesterday it is selling its animal health unit to Eli Lilly and Co. for $5.4 billion. The transaction will strengthen and diversify Lilly's own animal Health business, Elanco. Upon completion of the acquisition, Elanco will be the second largest animal health company in terms of global revenue.
Lilly Chairman, President and CEO, John C. Lechleiter, said the acquisition of Novartis Animal Health validates Lilly's commitment to Elanco as a key component of Lilly's business going forward.
"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," said Lechleiter. "Global trends suggest continued sustained demand for animal health products in the years ahead... we intend to create value for our shareholders through a larger commercial footprint, and improving efficiencies and lowering costs."
Lilly said it plans to fund the deal with about $3.4 billion of cash on hand and borrow $2 billion.
Separately, Novartis said it agreed to buy Britain's GlaxoSmithKline PLC (GSK) oncology products for $14.5 billion in milestone payment. Both moves are part of Novartis' effort to unload smaller business units and focus on areas where the company can lead the market.
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