The Federal Trade Commission is opening a 30-day comment period Tuesday on its conditions for Elanco Animal Health’s $7.6 billion purchase of Bayer Animal Health, paving the way for final approval of the deal.

Elanco must divest three products from its portfolio, including U.S. rights to StandGuard, a pour-on treatment for horn fly and lice control in beef cattle, which will be bought by Neogen.

The other two products are worldwide rights for Osurnia, a treatment for otitis externa in dogs, which is being sold to English company Dechra Pharmaceuticals, and U.S. rights for Capstar, an oral tablet that kills fleas in dogs and cats, being sold to PetIQ.

The FTC voted 4-0, with one abstention, July 15 to approve the acquisition subject to the conditions. “Each divestiture requires Elanco to transfer all intellectual property and other related assets to the respective buyers,” the agency said.

“This approval marks the near-final step in fulfilling our vision of bringing together two dedicated animal health companies focused on delivering innovation and an expanded portfolio of solutions to farmers, veterinarians and pet owners around the globe,” Elanco President and CEO Jim Simmons said in a news release.

Elanco said it expects the transaction to be finalized early next month

Neogen President and CEO John Adent said the sale of the U.S. rights for StandGuard was “an unexpected opportunity that we could not pass on. The product is a true bolt-on to complement our existing agricultural biosecurity infrastructure.”

Elanco has already gotten antitrust clearance for the Bayer Animal Health acquisition from the European Commission, Australia, Brazil, Canada, China, Colombia, New Zealand, South Africa, Turkey, Ukraine, and Vietnam.

Explaining the required divestiture of StandGuard, the FTC said in a Federal Register notice publishing tomorrow that “the market for brand-name cattle pour-on insecticides is highly concentrated. Bayer is the market leader, selling three cattle pour-on insecticide products (Clean-Up II, Cylence, and Permectrin),” and the only other competitors with “meaningful sales” are Merck & Co., which sells four products, and Elanco, which sells StandGuard.

“Thus, the proposed acquisition would allow the third largest competitor, Elanco, to acquire the market leader, Bayer, significantly increasing concentration in brand name cattle pour-on insecticides,” the commission said. “Moreover, to avoid insects becoming resistant to the active ingredients in insecticides, cattle producers typically cycle through different pour-on insecticides.”

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Elanco made announcements of the Osurnia and CapStar divestitures in January. A spokesperson said the sale of U.S. rights to StandGuard to Neogen was not unexpected.

“Elanco continues to expect necessary worldwide divestitures to be in the previously announced range of $120 million to $140 million of annual revenue to help advance regulatory reviews,” the company said.

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