Elanco Animal Health  (ELAN)  reached an agreement to buy an animal health unit of Germany's chemical-pharmaceutical giant Bayer  (BAYRY)  in a deal worth $7.6 billion.

 
Bayer AG will receive $5.32 billion in cash, subject to customary purchase price adjustments, and $2.28 billion or approximately 68 million Elanco Animal Health common shares.
 
The company said the deal, which is subject to approval from regulators, would double the size of its so-called companion animal (pets) business, and would be accretive to earnings in the first year.

 
Elanco said in a statement the combined organization will "continue to deliver mid-single digit revenue growth, while accelerating achievement of adjusted gross margin goals and delivering double digit adjusted EBITDA margin growth."

 
"The move combines our long-standing focus on the veterinarian while meeting pet owners' changing expectation of pet care and access to products," said Elanco CEO Jeffrey N. Simmons in a statement.

 
Elanco was falling 5.18% to $28.27 in trading Tuesday.