Germany’s Bayer seeks merger with Elanco

FRANKFURT/LONDON: Bayer has approached US drug firm Elanco Animal Health to discuss a possible combination of their pet-health businesses to create an industry giant, three sources familiar with the matter told Reuters.
The two companies are working with banks to ensure any merger would secure regulatory approval, the sources said, speaking on condition of anonymity.
Bayer has delayed the launch of an auction to private equity funds to clinch a bilateral deal with Elanco, the fourth-largest player in the animal health industry globally, the sources said.
The German drugmaker is under pressure to raise cash and boost its share price after its $63 billion purchase of Monsanto.
Elanco’s shares rose 5 per cent to $35.08 after Reuters reported the ongoing talks with Bayer, before easing to $34.08 by 1753 GMT.
Bayer ranks fifth in veterinary medicine. Aside from Elanco, its bigger rivals are former Pfizer unit Zoetis, unlisted Boehringer Ingelheim, which bought animal health assets from Sanofi, and drugmaker Merck & Co.
Bayer Chief Executive Werner Baumann said in November his company would divest several assets including its animal health division, which analysts have said could fetch 6 billion to 7 billion euros ($6.7 billion-$7.8 billion).
The sources said discussions with Elanco were at an early stage and Bayer remained interested in receiving bids from private equity investors later this year. — Reuters