Benzinga | Dec 1, 2020 04:34AM EST

Bayer Sells $1.6B Stake In Elanco Animal Health

Elanco Animal Health Inc (NYSE:ELAN) in a filing with the U.S. Securities and Exchange Commission on Monday disclosed that German pharma and life sciences company Bayer AG (OTC:BAYRY) is offloading a substantial stake it holds in Elanco through a public offering and generate $1.6 billion in proceeds.

In August this year, Bayer acquired 72.9 million Elanco shares after the sale of Bayer's Animal Health business segment.

What Happened According to the regulatory filing, Bayer is selling 54.5 million Elanco shares held by affiliate Bayer World Investments B.V. After the sale, Bayer will continue to hold about a 4% position in Elanco.

Bloomberg reports that Bayer would also divest the remaining shares in the future.

Why Does It Matter All proceeds from the stock sales would be diverted to settle legal costs related to Roundup, the glyphosate-based herbicide, as per Bloomberg.

Bayer agreed to a $10.9 billion settlement for lawsuits over the Roundup weedkiller in June. The onus to settle lawsuits was a result of the pharma company's acquisition of agro chem company Monsanto Co in 2018, the Wall Street Journal reported at the time.

Price Action ELAN closed at $30.59, 2.33% lower on Monday. Whereas BAYRY quoted $14.52, 2.30% lower.