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Merck Animal Health to Acquire Elanco’s Aqua Business

Bolsters Merck Animal Health’s position in the aqua industry with comprehensive approach to ensure fish health, welfare and sustainability in aquaculture, conservation and fisheries

Complements Merck Animal Health’s broad portfolio of veterinary pharmaceuticals, vaccines and technology solutions

Merck Animal Health, known as MSD Animal Health outside of the United States and Canada, a division of Merck & Co., Inc., Rahway, N.J., USA (NYSE:MRK), today announced that it has signed a definitive agreement to acquire the aqua business of Elanco Animal Health Incorporated (NYSE: ELAN) for $1.3 billion in cash, consisting of an innovative portfolio of medicines and vaccines, nutritionals and supplements for aquatic species; two related aqua manufacturing facilities in Canada and Vietnam; as well as a research facility in Chile. The acquisition is expected to be completed by mid-year 2024, subject to approvals from regulatory authorities and other customary closing conditions.

Upon closing, the acquisition will broaden Merck Animal Health’s aqua portfolio with products, such as CLYNAV®, a new generation DNA-based vaccine that protects Atlantic salmon against pancreas disease, and IMVIXA®, an anti-parasitic sea lice treatment. This acquisition also brings a portfolio of water treatment products for warm water production, complementing Merck Animal Health’s warm water vaccine portfolio. In addition to these products, the DNA-based vaccine technology that is a part of the business has the potential to accelerate the development of novel vaccines to address the unmet needs of the aqua industry.

“We are excited for the acquisition of Elanco’s aqua products, solutions as well as the capabilities and expertise the team brings to our business,” said Rick DeLuca, president, Merck Animal Health. “We believe this acquisition, coupled with our commercial and scientific prowess, will deliver enhanced benefits for our aqua customers. The addition of this innovative portfolio of cold water and warm water aqua products across vaccines, anti-parasitic treatments, water supplements and nutrition, will establish Merck Animal Health as a leader in aqua.”

Elanco Animal Health President and CEO Jeff Simmons said, Following a robust process over the last year, Merck Animal Health emerged as the right strategic buyer for the aquaculture business. I am confident they will continue to deliver value to the aqua customers that rely on these products and create opportunities for our team to continue to grow. We are deeply grateful to our aqua organization’s dedication to delivering for our customers and to our bigger purpose of enriching lives with animal protein.”

This acquisition will represent the latest in a series of acquisitions which have augmented Merck Animal Health’s aqua business. In March 2019, Merck Animal Health acquired Scan Aqua AS, a fish health and fish welfare company based in Norway, focused on key aqua products. In April 2019, Merck Animal Health announced the completion of its acquisition of Antelliq Corporation, which included BIOMARK, a passive integrated transponder (PIT) tagging and tracking technology for monitoring fish and wildlife. In December 2019, Merck Animal Health acquired Vaki, a leader in aquaculture and wild fish conservation monitoring equipment and real-time video monitoring technology for fish counting and size estimation from freshwater to saltwater rearing, while collecting and analytics for each stage of fish production.

Advisors

Goldman Sachs & Co., LLP acted as financial advisor to Merck Animal Health in this transaction and Covington & Burling LLP acted as its legal advisor.

About Merck Animal Health

At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than a century, we’ve been at the forefront of research, bringing forward medicines, vaccines and innovative health solutions for the world’s most challenging diseases. Merck Animal Health, a division of Merck & Co., Inc., Rahway, N.J., USA, is the global animal health business of Merck. Through its commitment to The Science of Healthier Animals®, Merck Animal Health offers veterinarians, farmers, producers, pet owners and governments one of the widest ranges of veterinary pharmaceuticals, vaccines and health management solutions and services as well as an extensive suite of connected technology that includes identification, traceability and monitoring products. Merck Animal Health is dedicated to preserving and improving the health, well-being and performance of animals and the people who care for them. It invests extensively in dynamic and comprehensive R&D resources and a modern, global supply chain. Merck Animal Health is present in more than 50 countries, while its products are available in some 150 markets. For more information, visit www.merck-animal-health.com and connect with us on LinkedIn, Facebook, X (formerly Twitter) and Instagram.

Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA

This news release of Merck & Co., Inc., Rahway, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including statements made regarding the potential benefits of the acquisition and the anticipated timing of the closing of the proposed transaction (the “transaction”). Such forward-looking statements include, but are not limited to, the ability of the company and Elanco to complete the transactions contemplated by the definitive agreement, including the parties’ ability to satisfy the conditions to the consummation of the transactions contemplated thereby, statements about the expected timetable for completing the transaction, the company’s and Elanco’s beliefs and expectations and statements about the benefits sought to be achieved in the company’s proposed acquisition of Elanco’s aquaculture business, the potential effects of the acquisition on both the company and Elanco, the possibility of any termination of the definitive agreement, as well as the expected benefits and success of Elanco’s aquaculture product candidates. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. There can be no guarantees that the conditions to the closing of the transaction will be satisfied on the expected timetable or at all, or that any pipeline candidate will receive the necessary regulatory approvals or prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, uncertainties as to the timing of the closing of the acquisition; the possibility that various conditions to the consummation of the transaction may not be satisfied or waived; the effects of disruption from the transaction and the impact of the announcement and pendency of the transactions on the company’s business; general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of the global outbreak of novel coronavirus disease (COVID-19); the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2022 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

Source: Merck & Co., Inc.

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