Bayer (BAYRY), which previously said in November that it would divest several assets including its animal health division as it seeks to raise cash after its $63B purchase of Monsanto, has approached Elanco Animal Health (ELAN) to discuss a possible combination of their pet-health businesses, according to Reuters, citing three sources familiar with the matter. Bayer, which is said to have delayed the launch of an auction to private equity funds to clinch a bilateral deal with Elanco, told Reuters that it was “progressing as planned” with efforts to separate the animal health business and declined to comment on Elanco, the report noted. In morning trading following Reuters’ report, Elanco shares are up $1.10, or 3%, to $34.47.