Elanco has secured EU antitrust clearance for its planned $7.6 billion purchase of Bayer's veterinary drugs business after agreeing to sell some product lines to address the European Commission’s competition concerns.

In a statement, the company said it now expects to close the acquisition on Aug. 3, even though the US Federal Trade Commission (FTC has not approved the deal. In late December last year, the US regulatory body issued a formal Second Request for information

In exchange for its approval, the European Commission said the parties will have to divest some of Elanco’s or Bayer's existing products sold in the EU or those in the pipeline, including licenses, contracts and brands aimed at treating otitis, anticoccidials, parasiticides for pets.

"With the divestment of current and pipeline products treating ear infections and parasites in pets and livestock, the merger can go ahead whilst preserving competition and innovation in these markets," Competition Commissioner Margrethe Vestager said.

Elanco’s acquisition of the related Bayer portfolio would create the world's second largest animal health company, with a share of 13%, behind Zoetis and ahead of unlisted Boehringer Ingelheim and Merck & Co.’s related businesses.

Analysts are forecasting annual growth rates of 5-6% for the $44 billion animal health sector, driven by an increase in livestock farming and spending on pets.

Elanco said said earlier that it plans to finance the cash payment with a combination of new debt and equity. Bayer is selling the business is to pay down debt from the Monsanto acquisition and free up funds to spend on healthcare.

The Leverkusen, Germany-based group also faces liabilities from the ongoing litigation process with potentially 125,000 US lawsuits over Monsanto’s Roundup herbicide still to be settled.

Bayer is seen as prepared to shell out around $10 billion to cover out-of-court settlements. It lost all three cases that originally went to trial. Its appeal of one of the verdicts is currently being heard in California.