The Commodity Futures Trading Commission (CFTC) announced on Wednesday that it will require Elanco Animal Health, Inc. and Bayer Animal Health GmbH to “divest three animal health products to settle charges that Elanco’s proposed $7.6 billion acquisition of Bayer would likely be anticompetitive in those markets.” The CFTC’s complaint alleged that Elanco’s proposed transaction would harm competition in three U.S. animal product markets.
The three potentially affected markets involve “low-dose prescription treatments for canine otitis externa,” “fast-acting oral treatments that kill adult fleas on dogs,” and “brand-name cattle pour-on insecticides.” Elanco and Bayer are the only companies offering products that treat canine otitis externa and that kill adult fleas on dogs, so the proposed acquisition would create monopolies for those markets. The two companies are also significant market leaders for cattle pour-on insecticides.
As part of the proposed settlement, the CFTC required that Bayer’s antibiotic Osurnia be divested to Dechra, Capstar flea treatment be divested to PetIQ, and StandGuard insecticide be divested to Neogen Corp. According to the press release, “Each divestiture requires Elanco to transfer all intellectual property and other related assets to the respective buyers.”
International antitrust agencies in Australia, Canada, New Zealand, and the United Kingdom helped the Commission analyze this proposed settlement and its “potential remedies.” The CFTC voted 4-0-1 in favor of issuing the complaint; Commissioner Rebecca Kelly Slaughter did not participate. The consent agreement will be published in the Federal Register.