Bayer Sells $1.6B Stake In Elanco Animal Health

Elanco Animal Health Inc (NYSE: ELAN) in a filing with the U.S. Securities and Exchange Commission on Monday disclosed that German pharma and life sciences company Bayer AG (OTC: BAYRY) is offloading a substantial stake it holds in Elanco through a public offering and generate $1.6 billion in proceeds.

In August this year, Bayer acquired 72.9 million Elanco shares after the sale of Bayer’s Animal Health business segment.

What Happened: According to the regulatory filing, Bayer is selling 54.5 million Elanco shares held by affiliate Bayer World Investments B.V. After the sale, Bayer will continue to hold about a 4% position in Elanco.

Bloomberg reports that Bayer would also divest the remaining shares in the future.

Why Does It Matter: All proceeds from the stock sales would be diverted to settle legal costs related to Roundup, the glyphosate-based herbicide, as per Bloomberg.

Bayer agreed to a $10.9 billion settlement for lawsuits over the Roundup weedkiller in June. The onus to settle lawsuits was a result of the pharma company’s acquisition of agro chem company Monsanto Co in 2018, the Wall Street Journal reported at the time.

Price Action: ELAN closed at $30.59, 2.33% lower on Monday. Whereas BAYRY quoted $14.52, 2.30% lower.