In one of several deals announced just after Easter, Swiss drugmaker Novartis said it would sell its animal health arm to U.S. rival Eli Lilly for about $5.4 billion.

Lilly said the deal would turn its Elanco unit from the world's no. 4 animal health group by revenue to the global no. 2 in a sector that supplies medicines, vaccines and feed additives for farm and domestic animals. The sector's biggest operator is Zoetis, spun off by Pfizer last year.

The Lilly business posted sales of $2.15 billion in 2013, up 6% year-on-year, compared with about $1.1 billion for Novartis' animal health activities. The deal crowns a period of fast expansion for Elanco, whose operating profit margins rose to 26% last year.

"Elanco has doubled its sales and tripled its profits between 2007 and today, and this acquisition really brings it into the top tier of companies," Lilly CEO  John Lechtleiter said in an interview. Other top players include U.S. drugmaker Merck & Co and France's Sanofi.

Thanks to vaccines and anti-parasite medicines from the Novartis deal, Lechleiter said Elanco will now be able to provide products for aquaculture, or fish farms, a business it had been eyeing. Lilly is also expanding its presence in eggs, through its planned acquisition of Germany's Lohmann Animal Health.

Elanco's products include its Elector PSP to kill flies and beetles in cattle sheds, and the Rumensin feed supplement to boost productivity of dairy and beef cows. Novartis' products range from its Atopica treatment for dermatitis in dogs and cats and its Denagard antibiotic for pigs and poultry.

Pets represent about 40% of the global animal health market, against around 60% for farm animals. With the takeover of the Novartis business, Elanco would become the No. 3 player in the pet health segment.