Sanofi Advances with CD&R Transaction for Share in Consumer Sector

Sanofi Advances with CD&R Transaction for Share in Consumer Sector

Sanofi Advances with CD&R Transaction for Share in Consumer Sector

Dive Brief:

  • Sanofi, the French pharmaceutical giant, is moving forward with its intention to divest a controlling interest in its consumer health division, Opella, to the U.S.-based private equity firm Clayton Dubilier & Rice. This transaction values Opella at approximately 16 billion euros, or around .3 billion.
  • The deal stipulates that CD&R will acquire a 50% stake in Opella, while Bpifrance, France’s state-owned investment bank, will secure a minority stake of roughly 2%.
  • The transaction is anticipated to close by the second quarter of 2025 at the earliest. Proceeds from the sale are expected to enhance Sanofi’s ability to invest in its biopharmaceutical portfolio.

Dive Insight:

The era of conglomerates within the pharmaceutical landscape is winding down. Sanofi’s choice to divest a portion of its consumer operations aligns with trends seen among major drug manufacturers, who are now prioritizing investments in high-margin pharmaceutical sectors. Firms like GSK, Johnson & Johnson, Pfizer, and Novartis have similarly divested parts of their consumer health divisions.

“We will support Opella in its journey toward independence,” stated Sanofi’s CEO Paul Hudson on Monday. “Simultaneously, Sanofi intends to redirect its focus towards delivering innovative solutions for patients with serious ailments or diseases like RSV, COPD, and multiple sclerosis.”

Sanofi has been contemplating the sale of part of Opella for several months, but only publicly confirmed negotiations with CD&R recently.

The discussions are now exclusively focused on CD&R, sidelining French private equity firm PAI Partners, which also expressed interest in acquiring Opella. PAI attempted to modify its bid following a deadline imposed by Sanofi, as reported by Reuters.

Concerns were raised that selling to a U.S. firm might jeopardize jobs in France, where Opella’s headquarters is located. The involvement of Bpifrance seems aimed at alleviating such worries. Antoine Armand, France’s economy minister, indicated on the platform X that the government secured “commitments regarding the preservation and growth of Opella in France,” according to the Guardian.

“We will ensure strict adherence to these commitments with our involvement through Bpifrance on Opella’s board and substantial financial penalties if these are not met,” Armand stated in his post.

Upon closing the transaction, Sanofi anticipates receiving a cash payment for the stake it is selling. The company has also revised its earnings per share outlook, now projecting that its 2024 business earnings per share will rise by at least a low-single digit percentage at constant currency rates.

Opella, known for products like Allegra and Doliprane, employs around 11,000 people across 100 nations and manages 13 manufacturing facilities.