Lilly closes Novartis Animal Health deal

Eli Lilly has completed the acquisition of Novartis Animal Health. The transaction, first announced on April 22, has received clearance under the Hart-Scott-Rodino Antitrust Improvements Act. As part of the approval, certain animal health assets in the U.S. relating to the Sentinel canine parasiticide franchise are to be divested to Virbac. All other closing conditions have also been met.

The acquisition adds to Lilly's global footprint, which now includes a total of 17 manufacturing sites and 14 R&D locations. The firm says that revenues will be more evenly split between food animal and companion animal, as well as stronger geographic representation.

"As a top-tier animal health company, we are better positioned to help our customers respond to the changing external environment and meet increasing demands for animal protein, as well as growing desires for pet ownership," said Jeff Simmons, senior vice president of Eli Lilly and Company and president of Elanco Animal Health.  "Our combination will deliver a more comprehensive suite of existing solutions, but will also allow us to dedicate greater resources to new product discovery and development."

Under the terms of the agreement, Lilly acquired the Novartis Animal Health business in an all-cash transaction of approximately $5.4 billion, including anticipated tax benefits. Lilly funded this acquisition with approximately $3.4 billion of cash-on-hand and $2.0 billion in debt. The impact of the acquisition, which closed on January 1, 2015, will be reflected in Lilly's first quarter 2015 financial statements.