German chemical and pharmaceutical group Bayer has said it's selling its Animal Health business unit to US-based drug firm Elanco for $7.6 billion to create an industry giant.

Bayer said in a statement that the sale, aimed at sharpening the company's focus on life sciences, was expected to be concluded in mid-2020 pending anti-trust clearance.

Bayer's Animal Health business is a global leader in the segment with sales of $1.8 billion last year. 

The deal will create the number two in the sector.

The transaction will consist of $5.3 billion in cash and $2.3 billion in Elanco stock, Bayer said.

As it struggles with ebbing revenues and profits, Bayer is selling off several divisions including chunks of its over-the-counter medicines division, known as Consumer Health.

After taking over US seeds and pesticides giant Monsanto for $63 billion last year, the Leverkusen-based group is reorganising itself around its core businesses and biggest earners in agri-chemicals and prescription pharmaceuticals.

Meanwhile it is busy battling thousands of US lawsuits over flagship Monsanto herbicides containing chemical glyphosate, which plaintiffs argue caused them to develop cancer after years of use.