Merck to buy animal health firm Antelliq for $2.4bn

Merck & Co is to buy animal health firm Antelliq Group for $2.4 billion in a bid to bolster this fast-growing business unit.

Antelliq, which is majority owned by private investors BC Partners, makes digital identification products for livestock and Merck is paying around 2.4 billion euros for the business.

Merck said Antelliq will be a wholly owned and separately operated subsidiary within its animal health division.

The move shows Merck & Co’s commitment to animal health after rival pharma companies such as Eli Lilly and Pfizer decided to spin them off and reap the rewards in the shorter term.

Eli Lilly has spun off its animal health unit, which has been trading as Elanco since making a strong debut on the stock market in September.

The spin-off raised $1.51 billion for Eli Lilly, which Pfizer’s spin-off of Zoetis raised around $2.2 billion in 2013.

Merck’s animal health unit is already a similar size to Elanco and Zoetis in terms of revenue.

According to Reuters Merck’s unit generated sales of $3.88 billion in 2017, compared with Zoetis’ $5.31 billion, and Elanco’s sales were around $3.09 billion.

Antelliq’s products bought in 360 million euros in sales in the year to September 30th 2018.

The company’s products digitally monitor animals’ health and help farmers and pet owners to predict diseases.

They allow access to real-time information to help improve livestock management and health outcomes.

Merck will assume Antelliq’s debt of 1.15 billion euros, and aims to repay this shortly after the deal closes in Q2 next year.

Merck’s CEO Ken Frazier said the acquisition will “complement” the company’s animal health offering “by adding market-leading digital products, extending the range of solutions we can provide our customers and further driving the growth of our business.”

“This acquisition is well aligned with our strategy to generate long-term growth and sustainable value for our customers and shareholders.”