Summary
Eli Lilly and Company (LLY) has completed the separation of substantially all of its animal health businesses into its subsidiary, Elanco Animal Health Incorporated (Elanco). This was executed through a series of transactions, culminating in Elanco's initial public offering (IPO) on September 24, 2018. Eli Lilly retains an 80.2% ownership stake in Elanco following the IPO, and will continue to consolidate Elanco's financial results. The net proceeds from Elanco's IPO and a prior senior notes offering were paid to Eli Lilly as consideration for the transferred animal health assets. Eli Lilly intends to divest its remaining stake in Elanco through a tax-efficient transaction in the future.
Key Highlights
- 1Eli Lilly has separated its animal health division into a distinct entity, Elanco Animal Health Incorporated.
- 2Elanco successfully completed its Initial Public Offering (IPO) on September 24, 2018, pricing shares at $24.00.
- 3Eli Lilly retains a significant 80.2% ownership interest in Elanco post-IPO.
- 4The proceeds from Elanco's IPO and a prior senior notes offering have been largely transferred to Eli Lilly as compensation for the animal health business.
- 5Elanco's financial results will continue to be consolidated within Eli Lilly's financial statements.
- 6Eli Lilly plans to divest its remaining ownership in Elanco in a tax-efficient manner at a future date.
- 7The Master Separation Agreement between Eli Lilly and Elanco is incorporated by reference.
Frequently Asked Questions
The separation allows Eli Lilly to focus on its core pharmaceutical business while retaining a substantial stake in a separate, publicly traded animal health company. The proceeds from the separation are beneficial to Lilly, and the planned future divestiture aims to unlock further value.
Yes, for financial reporting purposes, Eli Lilly will continue to consolidate Elanco's results. This means Elanco's revenues and expenses will be included in Eli Lilly's consolidated financial statements.
Eli Lilly intends to divest its remaining ownership in Elanco through a tax-efficient transaction in the future. The exact timing and method of this divestiture will be determined later.
Eli Lilly received the net proceeds from Elanco's IPO and its August 2018 private placement of senior notes as consideration for the animal health businesses transferred to Elanco, after certain amounts were retained by Elanco.