Elanco Animal Health announced June 8 that the European Commission (EC) has granted conditional approval of its pending acquisition of Bayer AG’s animal health business. The announcement brings the company one step closer to a midyear closing, which is anticipated to be Aug. 3, 2020.

“Approval from the European Commission is an important milestone toward the completion of our acquisition of Bayer Animal Health,” Elanco president and chief executive officer Jeff Simmons said. “As the transaction edges closer to fruition, we look forward to turning our full attention to delivering innovation and an expanded portfolio of solutions for farmers, veterinarians and pet owners across the globe. The recent months have only underscored the critical work our farmers do in delivering meat, milk, fish and eggs and the importance of providing pet owners and veterinarians with a variety of solutions in multiple channels, from telemedicine and e-commerce to direct home delivery. Combining Bayer Animal Health’s leadership in these areas better positions Elanco to deliver on these needs.”

The complementary nature of the transaction, combining Elanco’s long-standing focus on the veterinarian with Bayer’s direct-to-consumer expertise will strengthen and accelerate the company’s Innovation, Portfolio and Productivity strategy, the company said. It advances Elanco’s portfolio transformation, creating a balance between the farm animal and pet businesses, and expands Elanco’s omnichannel approach, substantially diversifying its pet health business into the retail and e-commerce channels as Elanco continues to determine the best methods for reaching pet owners and veterinarians.

Elanco previously announced divestiture agreements in the range of $120-140 million of revenue to help advance the needed regulatory reviews.

The EC approval is conditional on several of these proposed divestitures, including:

In addition to EC approval, Elanco has received antitrust clearance for the transaction in China, Colombia, South Africa, Turkey, Ukraine and Vietnam and provisional clearance in Brazil. Elanco said it continues to cooperate with agencies in other jurisdictions. Further, Elanco fully secured financing early in the first quarter of 2020 to complete the transaction through its completed equity issuance and pricing of its Term Loan B, which will fund at deal close.

The transaction remains subject to additional regulatory approvals and customary closing conditions.