(Corrects spelling of "separately" in paragraph 7)
April 22 Eli Lilly and Co said on
Tuesday it will buy Swiss drugmaker Novartis AG's
animal health business for $5.4 billion in cash to strengthen
and diversify its Elanco unit.
Lilly said it plans to fund the deal with about $3.4 billion
of cash on hand and $2 billion of loans. The company did not
disclose any other financial terms of the deal.
"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," Lilly's Chief Executive John
Lilly expects cost savings of about $200 million per year
within three years of closing the deal. It also expects the
purchase to add to its profit on a cash basis from 2016,
excluding integration costs.
Lilly said the deal is not expected to change its dividend
policy or current share repurchase program.
BofA Merrill Lynch is acting as financial adviser and Weil,
Gotshal & Manges LLP is the legal counsel to Lilly. Goldman
Sachs is acting as financial adviser to Novartis, while
Freshfields Bruckhaus Deringer is its legal counsel.
Separately, Novartis said it agreed to buy GSK's
oncology products for $14.5 billion. The deal also includes up
to $1.5 billion in milestone payment. The Swiss drugmaker said
it would sell its vaccines business, excluding its flu business,
to GSK for $7.1 billion plus royalties.
(Reporting by Arnab Sen in Bangalore; Editing by Gopakumar