Dive Brief:
- French pharmaceutical company Sanofi is proceeding with plans to sell U.S.-based private equity firm Clayton Dubilier & Rice a controlling stake in its consumer health busines Opella, which would be valued at around 16 billion euros, or about $17.3 billion, in the deal.
- Under the proposed terms, CD&R would take a 50% stake in Opella, while Bpifrance, the state-owned investment bank of France, would become a minority shareholder holding about 2%.
- Sanofi expects the deal to close in the second quarter of 2025 at the earliest. The resulting cash infusion would give Sanofi more resources to pour into its biopharmaceutical drugs business.
Dive Insight:
The pharmaceutical industry’s conglomerate era is coming to an end. Sanofi’s decision to divest part of its consumer business mirrors that of other large drugmakers, many of which now favor more focused bets on high-margin pharmaceuticals. GSK, Johnson & Johnson, Pfizer and Novartis have all sold or otherwise divested consumer health arms.
“We will support Opella on its path to become an independent company,” said Sanofi CEO Paul Hudson in a statement Monday. “At the same time, Sanofi can focus even more in bringing innovative solutions to patients suffering from debilitating or life-threatening diseases or viruses such as RSV, COPD, or multiple sclerosis.”
Sanofi has been discussing its plans to sell off part of Opella for months, but didn’t officially announce negotiations with CD&R until earlier this month.
Those talks are now proceeding exclusively, shutting out the French private equity firm PAI Partners, which, also bid for Opella. PAI had attemped to raise its bid after a deadline set by Sanofi, according to Reuters.
There were concerns that a sale to an American firm might result in job losses in France, where Opella is headquartered. Bpifrance’s involvement appears designed to address that issue. France’s economy minister, Antoine Armand, said on the social media platform X that the French government had obtained “guarantees on the maintenance and development of Opella in France,” per the Guardian.
“Strict compliance with these commitments will be ensured by our presence, through BpiFrance on the Opella board of directors and by unprecedented financial penalties in the event of failure,” Armand said in the post.
Sanofi expects to receive a cash payment for the stake it’s divesting upon the deal’s closing. The company also updated its earnings per share guidance, and now expects its 2024 business EPS to grow by at least a low-single digit percentage at constant exchange rates.
The maker of brands like Allegra and Doliprane, Opella employs some 11,000 staff across 100 countries. It operates 13 manufacturing plants.
