Merck Animal Health, a division of Merck & Co., has announced that it will acquire the aqua business of Elanco Animal Health for $1.3 billion in cash. The deal will add a range of products and solutions for aquatic species, as well as manufacturing and research facilities, to Merck Animal Health’s existing aqua portfolio.
The acquisition, which is expected to be completed by mid-year 2024, will bolster Merck Animal Health’s position in the aqua industry, which is one of the fastest-growing segments of animal health. The deal will include an innovative portfolio of medicines and vaccines, nutritionals and supplements for aquatic species, such as salmon, trout, tilapia, shrimp, and ornamental fish. The deal will also include two related aqua manufacturing facilities in Canada and Vietnam, as well as a research facility in Chile.
Merck Animal Health will gain access to new technologies and capabilities that will enhance its offerings and services for aqua customers, according to Rick DeLuca, president of Merck Animal Health. He said, “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.”
A win-win situation for both Merck Animal Health and Elanco Animal Health
The acquisition will also benefit both Merck Animal Health and Elanco Animal Health, as they will be able to focus and invest on their core areas of strength and growth. Merck Animal Health will be able to leverage its global presence and expertise in animal health, while Elanco Animal Health will be able to reduce its debt and prioritize its investments in pet health and livestock sustainability.
Jeff Simmons, president and CEO of Elanco Animal Health, 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.”
A positive impact on the aqua industry and the society
The acquisition will also have a positive impact on the aqua industry and the society, as it will support the health, welfare, and sustainability of aquatic species, which are vital for food security and biodiversity. The acquisition will also enable Merck Animal Health and Elanco Animal Health to contribute to the United Nations Sustainable Development Goals, such as ending hunger, ensuring healthy lives, and protecting the environment.
The aqua industry is expected to grow significantly in the coming years, as the demand for aquatic protein increases along with the global population and income. According to the Food and Agriculture Organization, aquaculture production is projected to reach 109 million tonnes by 2030, accounting for 60% of the total fish supply for human consumption. Therefore, the acquisition will help Merck Animal Health and Elanco Animal Health to meet the current and future needs of the aqua industry and the society.