Sanofi (SNY.US) confirms exclusive negotiations with CD&R for the sale of its consumer health business Opella
1min read Zhitong Finance learned that Sanofi (SNY.US) said on Monday that it had entered into exclusive negotiations to sell a 50% controlling stake in its consumer health business Opella to Clayton Dubilier & Rice, a US private equity firm. The French pharmaceutical company is joining a growing list of drugmakers shedding consumer-related businesses, saying it valued Opella at about 16 billion euros ($17 billion), 14 times its estimated core profit (EBITDA) in 2024. Sanofi said the proposed transaction was still subject to a final agreement and regulatory approval, and is expected to be completed by the second quarter of 2025.
The reports of an imminent deal in recent weeks have drawn criticism from the government's opposition, which said it would lose a strategic asset and lead to worker strikes, and a new offer from rival PAI Partners for the business. French government sources said on Sunday evening that Sanofi had reached agreement on the terms of the deal after assuring Paris that jobs and production would be maintained in France.
Sanofi said in a statement that Bpifrance, the French public investment bank, was expected to become a minority shareholder in Sanofi, holding about 2% of the shares.
Sanofi's chief executive Paul Hudson spoke to reporters on Monday about the choice of a buyer: "We have chosen a group with the best capabilities and talent that will help us achieve the long-term success of our business." He added that while the time Sanofi would be involved in the Opella project had not been determined, "we expect to be involved in the long term and maintain a cooperative relationship."
Opella has 11,000 employees worldwide, selling popular French painkiller Doliprane, as well as Mucosolvan cough syrup, Allegra allergy treatment and Buscopan painkiller brands.
The company said a year ago it was assessing options for spinning off its consumer health business. It has said it will use proceeds from the sale to provide more resources for the development of costly new immunology and inflammation drugs.
Sanofi also raised its EPS expectations, saying it expects at least low single-digit percentage growth in 2024 EPS, excluding Opella, on a constant currency basis. The company said it would raise its EPS expectations from stable to low single-digit percentage growth, including Opella.
