Competition Bureau resolves concerns related to Elanco’s acquisition of Bayer Animal Health
July 14, 2020 – GATINEAU, QC – Competition Bureau
The Competition Bureau announced today that it has entered into a consent agreement with Elanco Animal Health Incorporated (Elanco) to address concerns related to the company’s proposed acquisition of Bayer Animal Health (BAH). Elanco has also committed to forego acquiring Bayer AG’s (Bayer) Canadian distribution rights to several poultry insecticides.
Following an extensive review, the Bureau concluded that Elanco and BAH are each other’s closest competitors in several Canadian markets, that there are few remaining effective competitors in these markets and that the proposed transaction would have resulted in a substantial lessening of competition. The relevant markets include those for low dose canine otitis treatments, feline dewormers with tapeworm coverage and poultry insecticides with darkling beetle coverage.
To remedy the Bureau’s concerns, the consent agreement requires Elanco to divest its canine otitis product, Osurnia, as well as BAH’s feline dewormer, Profender. The consent agreement also notes Elanco’s commitment to forego acquiring the Canadian distribution rights to Bayer’s Tempo, Credo, QuickBayt and Annihilator Polyzone poultry insecticides. Rather, Bayer’s CropScience division will retain these distribution rights. The consent agreement also prevents Elanco, without the Bureau’s approval, from acquiring Bayer’s retained poultry insecticides with darkling beetle coverage for a period of 10 years and from acquiring a significant interest in any poultry insecticides with darkling beetle coverage for a period of 2 years without providing advance notice to the Bureau and waiting a prescribed period of time to complete the acquisition.
The Bureau is satisfied that this agreement, including Elanco’s commitments related to poultry insecticides, will address its competition concerns in Canada. For more information on the Bureau's review, consult our comprehensive position statement.
“Animal health products play a critical role in pet care and in the agri-food sector across the country. The agreement concluded today supports our commitment to take action on matters that are important to Canadians, as it will safeguard competitive prices and product choice for consumers and business owners.”
Commissioner of Competition
Elanco and Bayer notified the Bureau of the agreement regarding BAH on November 22, 2019. The proposed transaction is valued at approximately CAD$10.3 billion.
Under the agreement, the Bureau has approved Dechra Limited and Dechra Veterinary Products LLC as acceptable buyers of Osurnia.
The Bureau worked closely with the U.S. Federal Trade Commission, the European Commission and the Australian Competition and Consumer Commission throughout its review of the transaction.
Bayer Animal Health is a business unit of Bayer AG.
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The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.
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