The cash and stock deal will see Elanco becoming the world’s second biggest animal health company and expand its footprint in the pet e-commerce space.

On Tuesday, Elanco Animal Health stated it would acquire Bayer’s veterinary drugs business in what is a cash and stock deal worth $7.6 billion. Following the deal Elanco will become the second biggest animal health business and it will expand its footprint in the pet e-commerce space.

The deal is expected to close by mid-2020, said Elanco.

In a joint statement both companies said, “Bayer would receive $5.3 billion in cash and $2.3 billion worth of Elanco stock based on the unaffected 30-day average price as of Aug. 6 and subject to a 7.5% symmetrical collar”.

Bayer went on to add, the price represents an implied multiple of 18.8 times adjusted core earnings.

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Tags: acquire, adjusted core earnings, animal health, Bayer, cash, deal, e-commerce, Elanco Animal Health, footprint, mergers and acquisition, pet, stock, veterinary drugs business, veterinary drugs unit