Intervet International B.V. entered into an asset purchase agreement to acquire Assets of Aqua Business from Elanco Animal Health Incorporated (NYSE:ELAN) for approximately $1.3 billion on February 5, 2024. The divestiture includes current marketed brands, aqua R&D projects, the transfer of manufacturing sites in Prince Edward Island, Canada and Dong Nai, Vietnam and approximately 280 commercial and manufacturing employees. The consideration consists of approximately $1.3 billion in cash payable at closing, subject to adjustments.

Intervet International will assume the liabilities arising out of the conduct of the business from and after the closing. As part of the consideration, $1.3 billion was paid towards assets. In case of termination of transaction, buyer will pay a termination fee of $55 million.

The transaction is subject to regulatory approvals, antitrust approval and customary closing conditions and adjustments. The transaction is expected to close by mid-year 2024. Upon closing of the transaction, Elanco plans to use the expected $1.05 billion to $1.1 billion of after-tax cash proceeds to pay down a portion of the Term Loan B debt.

Ivan Farman and Roman Makovitskiy of BofA Securities, Inc. acted as financial advisors and James Hu, Andres Liivak and Robert Milne of White & Case LLP acted as legal advisors to Elanco Animal Health. Aekloveya Shyam, Marlene Giorgio, Marc Schaffer and Peter van der Goes of Goldman Sachs acted as financial advisors and Catherine J. Dargan, Drew Fischer and Winsome Cheung of Covington & Burling LLP acted as legal advisors to Merck. Stephen Weissman and Nicholas Banasevic of Gibson, Dunn & Crutcher LLP are antitrust counsel to Merck.

At Elanco, Shiv Oâ'Neill is on the deal and at Merck, Erin J. Howell and Melissa Erdogdu are on the deal.