Elanco Buys rBGH From Monsanto
Elanco, a division of Indianapolis-based drug giant Eli Lilly and Company,announced today it was buying the rBGH (Posilac®) division of Monsanto for $300 million, plus unspecified fees in the future. Elanco will also get Monsanto's manufacturing plant in Augusta, GA, along with its employees. The deal is expected to be final in October.
For the last 10 years, Elanco has sold rBGH for Monsanto outside the U.S., primarily in Mexico, Brazil and South Africa. One of the main reasons they cited for the purchase is the growing demand for dairy products in overseas markets, especially in Asia.
Here's my take on this:
From a core priority standpoint, the deal makes sense for both companies. Monsanto gets rid of a royal headache that increasingly was becoming more marginal to its core business of genetically engineered seeds and pesticides. Elanco gains a product that fits in well with its animal drug business. Obviously they believe that the benefits outweigh rBGH's controversial baggage, especially outside the U.S.
Don't expect Elanco to deviate from the party line established by Monsanto. They will insist that there are no human or animal health risks, in spite of the scientific evidence. They will continue to keep tight-lipped about sales figures. And they have already put out incorrect statements, such as rBGH is "genetically identical to what cows produce naturally." In case you're wondering, no it isn't.
They may not be as confrontational as Monsanto, but we'll see. They're mum on whether they will become involved in the state labeling battles, including the pending lawsuit in Ohio. Also, we don't know if they will be a new sugar daddy for front groups like AFACT that have been Monsanto's surrogates in numerous states. As we've said before, we will still be a nationwide leader in opposing rBGH, regardless of who owns it. The more consumers find out about this hormone, the more they avoid it. And we'll do everything we can to make sure they find out.