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Elanco Bayer Purchase Agreement

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The companies signed an acquisition contract in August 2019. The transaction was completed after completing the conditions, including obtaining regulatory approvals. Bayer`s former animal health business employs about 4,400 people and generated sales of 1.57 billion euros in 2019. In accordance with Section 6 F of the Federal Trade Commission Act 15 U.S.C. 46 (f) and FTC Rule 2.34, 16 CFR 2.34, a press release, is heresafter, that the « Start Printed Page 44081consent Agreement, » entitled above, which contains a compliant notice order on omission and omission after being submitted to the Commission and accepted subject to final approval, has been made public for a period of thirty (30) days. The following analysis of the agreement, the approval orders in support of the public commentary describes the terms of the approval agreement and the allegations in the complaint. An electronic copy of the full text of the compliant notice package may be available on the FTC website (july 15, 2020) at www.ftc.gov/ News Events/Commission-Actions website. Key Terms and Financing Elanco will finance the transaction through both cash and equity. Bayer AG receives $5.32 billion in cash and $2.28 billion, or about 68 million common shares of Elanco Animal Health, subject to customary purchase price adjustments. This corresponds to a cash-to-equity mix of 70 to 30 per cent. The stock received by Bayer is subject to a symmetrical 7.5 per cent pass centered on Elanco`s volume-weighted average price for the 30 trading days to August 6, 2019 of $33.60.

Elanco secured a bridge commitment for the consideration`s cash portion. It intends to finance the cash payment through a combination of new debt and equity. At the close of trading, Elanco expects its gross debt in the Adjusted EBITDA leverage ratio to be 5x, including expected cost risks. The cash flow generation profile of the combined divisions will enable Elanco to rapidly reduce gross debt on Adjusted EBITDA by the end of 2022. The transaction is expected to be completed by mid-2020, subject to regulatory approvals and other customary closing conditions. Each of the divestitures requires Elanco to transfer all delivery specifications and other manufacturing contracts, business information, product approvals (including relevant FDA marketing authorizations), intellectual property and other related assets to the purchaser concerned. The proposed approval agreement also contains provisions to ensure that disposals are completed and timely, including provisions requiring Elanco to allow buyers to verify product contracts and appoint competent collaborators to assist each buyer in transferring and integrating the product sold into its business. The Commission appoints an interim monitor to ensure that the parties fulfil all its obligations under the approval agreement and keep the Commission informed of the transfer status of rights and assets to Dechra, PetIQ and Neogen. The Commission`s objective in assessing potential acquirers of rights and divested assets is to preserve the competitive environment that existed prior to the proposed acquisition. Investors: Jim Greffet -1.317.383.9935 greffet_james_f@elanco.com Media: Colleen Parr Dekker – 1.317.989.7011 greffet_james_f@elanco.com Colleen_parr_dekker@elanco.com ABOUT ELANCO Elanco (NYSE: ELAN) is a global healthcare company that develops knowledge products and services for the prevention and treatment of diseases in animals and pets in more than 90 countries.

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