Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: United States
Elanco logo

Elanco restructures to save $100M

Company will eliminate more than 900 positions across 40 countries.

Elanco Animal Health is eliminating more than 900 positions across nearly 40 countries, NASDAQ reported. The eliminated positions will be primarily in sales and marketing, and also in research and development, manufacturing and quality, and back office support.

The company expects to realize at least $100 million of annual compensation and benefits savings with the job cuts.

“After our early view of the combined business, we have full confidence in delivering $275 million to $300 million in synergies, with the first two-thirds coming in the first 30 months," said Jeff Simmons, president and CEO of Elanco. "Today’s actions will reduce duplication and increase efficiency within our global footprint, while the team builds longer term plans around procurement savings, SKU optimization and streamlining manufacturing processes. While decisions that affect our employees are always difficult, we remain committed to treating affected employees with our guiding value of respect and following all local consultation processes.”

This is the first restructuring action since the closing of the $6.89 billion acquisition of Bayer's veterinary drugs unit, U.S. News & World Report reported. The acquisition closed in August 2020.

The cost of the proposed actions is expected to be between $190 million and $210 million with approximately $170 million to $190 million in severance and approximately $20 million in asset impairments and other charges, according to Elanco Animal Health. As part of the transaction with Bayer A.G., $35 million was reflected in the purchase price attributable to Elanco’s restructuring costs. Cash severance payments will be distributed over the next two years. Elanco expects to incur a restructuring charge of $130 million to $145 million in Q3 2020 along with $40 million to $45 million in Q4 2020. The remaining estimated $20 million will be incurred in 2021.

“Our team is focused on making the tough decisions that drive value quickly while enabling our innovation and growth strategies," Simmons said. The acquisition strengthens Elanco’s Innovation, Portfolio, Productivity (IPP) strategy. The transaction also adds new R&D capabilities, including innovative dosing and delivery technology platforms, and provides access rights to Bayer’s Crop Science R&D pipeline and de-prioritized clinical pharma assets.

Elanco Animal Health is eliminating more than 900 positions across nearly 40 countries, NASDAQ reported. The eliminated positions will be primarily in sales and marketing, and also in research and development, manufacturing and quality, and back office support.

The company expects to realize at least $100 million of annual compensation and benefits savings with the job cuts.

“After our early view of the combined business, we have full confidence in delivering $275 million to $300 million in synergies, with the first two-thirds coming in the first 30 months," said Jeff Simmons, president and CEO of Elanco. "Today’s actions will reduce duplication and increase efficiency within our global footprint, while the team builds longer term plans around procurement savings, SKU optimization and streamlining manufacturing processes. While decisions that affect our employees are always difficult, we remain committed to treating affected employees with our guiding value of respect and following all local consultation processes.”

This is the first restructuring action since the closing of the $6.89 billion acquisition of Bayer's veterinary drugs unit, U.S. News & World Report reported. The acquisition closed in August 2020.

The cost of the proposed actions is expected to be between $190 million and $210 million with approximately $170 million to $190 million in severance and approximately $20 million in asset impairments and other charges, according to Elanco Animal Health. As part of the transaction with Bayer A.G., $35 million was reflected in the purchase price attributable to Elanco’s restructuring costs. Cash severance payments will be distributed over the next two years. Elanco expects to incur a restructuring charge of $130 million to $145 million in Q3 2020 along with $40 million to $45 million in Q4 2020. The remaining estimated $20 million will be incurred in 2021.

“Our team is focused on making the tough decisions that drive value quickly while enabling our innovation and growth strategies," Simmons said. The acquisition strengthens Elanco’s Innovation, Portfolio, Productivity (IPP) strategy. The transaction also adds new R&D capabilities, including innovative dosing and delivery technology platforms, and provides access rights to Bayer’s Crop Science R&D pipeline and de-prioritized clinical pharma assets.

Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish