Animal health product manufacturers Eli Lilly and Co (Elanco) and Novartis are moving into the final stages of a merger, delivering further rationalisation in the ever-evolving veterinary and animal health market.

In an announcement to the market this afternoon, Elanco said it had finalised the acquisition of Novartis Animal Health, creating a new global entity in the animal health field “focused on delivering increased value and innovation to the industry.”

The acquisition, announced last April, follows Elanco’s purchase of Lohmann Animal Health earlier in 2014.

Both strategic investments positioned Elanco to offer a more diversified product offering and capabilities to help customers sustain and grow their businesses, the statement said.

The acquisition will bring a total of 17 manufacturing sites and 14 R&D locations in the newly combined organisation.

Elanco’s revenues are expected to be more evenly split between food animal and companion animal businesses. Added to Elanco’s existing brands will be a comprehensive portfolio of almost 300 products developed by Novartis and Lohmann encompassing therapeutics, vaccines, parasiticides, antimicrobials, surgical, enzymes and food safety.

“Elanco’s acquisition of Novartis Animal Health brings together two strong companies with a passion for serving the customer,” said Elanco’s Australian and NZ general manager, Michele Genini.

“We will continue to offer the products our customers’ trust, while significantly investing in the development of new solutions to our customers’ greatest unmet needs,” Mr Genini said.

Going forward, Elanco says it will significantly increase investment in research and development, bringing greater breadth and depth to an already strong pipeline.

The combined global organisation will have expanded capabilities and expertise with a broader portfolio of more than 100 product development projects focused on protecting livestock from disease and parasites, improving animal well-being and reducing the environmental foot print of livestock production. R&D work will also focus on providing broader solutions in areas such as enzymes, diagnostics and vaccines.

“Elanco is committed to helping producers produce more food using fewer resources to meet the growing demand for animal protein, while protecting the planet and well-being of animals,” today’s statement said.

The complete integration of the three businesses will take time, Elanco said, but the company planned to strive to make the transition seamless. For the foreseeable future, business will continue in much the same way, including product ordering and customer support.

Availability and access to products will continue uninterrupted, the statement said.

Under the terms of the agreement, Elanco acquired the Novartis Animal Health business in an all-cash transaction of approximately US$5.4 billion, including anticipated tax benefits. Elanco funded the acquisition with $3.4 billion of cash-on-hand and $2 billion in debt.