Indiana-based Elanco Animal Health has agreed to buy Bayer AG’s animal health business in a cash and stock deal valued at $7.6 billion. The transaction creates the second largest maker of medicines for pets and livestock and accelerates Elanco’s innovation, portfolio and productivity strategy.

The deal adds to the list of assets sold by Bayer, as the German company looks to slash debt from its $63 billion takeover of seed maker Monsanto last year and as it braces for a potential settlement of lawsuits over an alleged cancer-causing effect of weedkiller Roundup, according to Reuters.

Bayer also plans to close its Robinson site by 2020, which was the American headquarters for the corporation.

Bayer will receive $5.32 billion in cash and $2.28 billion or approximately 68 million Elanco Animal Health common shares. This represents a 70 percent to 30 percent cash-to-equity mix.  Stock received by Bayer is based on a price of $33.60 per share, the 30-day average price as of Aug. 6. But the number of shares could rise or fall by as much as 7.5 percent, depending on Elanco’s share price performance on the closing date.

The transaction will double Elanco’s Companion Animal business, advancing the company’s intentional portfolio mix transformation and creating a balance between its Food Animal and Companion Animal segments. Elanco expects the combined organization to continue to deliver mid-single digit revenue growth, while accelerating achievement of adjusted gross margin goals and delivering double digit adjusted EBITDA margin growth.

Elanco has secured a bridge commitment for the cash portion of the deal, which it intends to fund through a combination of new debt and equity.

The transaction is expected to close in mid-2020, subject to regulatory approvals and other customary closing conditions.