FRANCE – Sanofi, the French multinational pharmaceutical company, has entered into discussions with U.S.-based private equity firm Clayton, Dubilier & Rice (CD&R) regarding the potential sale of a 50% controlling interest in its consumer health division, Opella.
This strategic decision is part of Sanofi’s broader initiative to concentrate on its primary business areas, which include innovative medications and vaccines.
The deal is reported to value Sanofi’s consumer health business at approximately €15.5 billion (around US $17 billion).
Opella is recognized as a major player in the over-the-counter (OTC) and vitamins, minerals, and supplements market, ranking as the third-largest entity in this sector.
The division boasts a robust portfolio of over 100 brands, including well-known products like Allegra, Icy Hot, and Doliprane.
Sanofi’s recent performance report indicated that Opella achieved nearly a 10% increase in revenue during the second quarter, largely fueled by the successful acquisition of Qunol, a brand known for its dietary supplements, including CoQ10 and turmeric-based products.
Through the first half of the year, Opella accounted for about 13.3% of Sanofi’s overall business, highlighting its significance to the company’s financial health.
Recent trends in consumer health divestments
The move to divest from consumer health aligns with a broader trend among pharmaceutical companies to streamline operations and focus on core competencies.
In recent months, notable industry players like Johnson & Johnson and Pfizer have also engaged in significant consumer health divestments.
Johnson & Johnson spun off its consumer health division into a separate entity called Kenvue in August 2023, which now boasts a market capitalization exceeding US $40 billion.
Similarly, Pfizer recently sold a US $3.3 billion stake in Haleon, a consumer health venture in collaboration with GSK.
Negotiation context and future prospects
Sanofi’s Chief Financial Officer, François-Xavier Roger, mentioned in the company’s second-quarter earnings call that the firm was considering three potential paths for its consumer health unit: a spinout, an initial public offering (IPO), or a sale.
As of that meeting, no definitive course of action had been determined, but all options remained viable with the goal of maximizing shareholder value.
Reports indicate that CD&R has positioned itself as a leading candidate in this competitive process, outbidding rival PAI Partners for the opportunity to acquire a stake in Opella.
The French finance ministry has recognized CD&R as a credible investment firm with favorable prospects for Opella’s growth, emphasizing the importance of preserving Opella’s decision-making capabilities in France and safeguarding the company’s operational footprint within the country.
Commitments and economic considerations
As part of the negotiation process, the French finance ministry has outlined several economic commitments that both Sanofi and CD&R must adhere to.
These commitments include maintaining Opella’s operational decision-making centers in France and ensuring that the production of essential medications, such as Doliprane, remains unaffected by the sale.
In addition to its impressive portfolio, Opella employs over 11,000 individuals across more than 100 countries, operating 13 manufacturing sites and four research and innovation centers.
