FRANCE – Sanofi, the French pharmaceutical giant, has initiated exclusive negotiations with U.S. private equity firm Clayton Dubilier & Rice (CD&R) for the sale of a 50% stake in its consumer health business, Opella.
The deal, valued at €16 billion (US $17.3 billion), includes a commitment to retain jobs and production facilities in France, following concerns about potential economic fallout from the sale to a foreign company.
The negotiations, which saw CD&R outbid PAI Partners, are expected to close no earlier than the second quarter of 2025.
Key details of the deal
Sanofi, known for its significant role in the global over-the-counter and vitamins, minerals, and supplements market, values Opella at approximately 14 times its estimated 2024 core earnings (EBITDA).
This sale marks a strategic move by Sanofi as it shifts its focus towards the development of innovative medicines and vaccines.
While CD&R will take a controlling stake, French public investment bank Bpifrance will acquire a 2% share and a seat on Opella’s board.
Bpifrance plans to invest between €108 million (US $116.9 million) and €163 million (US $176.4 million), reinforcing the French government’s involvement in the deal.
Government concerns and safeguards
The French government, initially alarmed by the prospect of a key national asset being sold to a foreign entity, has reached an agreement with CD&R and Sanofi to preserve French jobs and regional production.
Antoine Armand, France’s economy minister, emphasized that “strict measures and penalties” will be enforced to ensure compliance with these commitments.
Among the guarantees is a pledge from CD&R to invest €70 million (US $75.7 million) in French operations over the next five years, maintaining the workforce of 1,700 people and key factories in Lisieux and Compiègne.
Should Opella fail to uphold these promises, it faces penalties exceeding €100 million (US $108.2 million).
Furthermore, Opella will continue sourcing paracetamol’s active ingredient from French supplier Seqens under a long-term contract, with additional fines for any breach of this agreement.
Opella’s market position and product line
Opella, the third-largest player in the global over-the-counter market, employs over 11,000 people worldwide.
Its product portfolio includes popular medications such as Doliprane (paracetamol), Allegra (fexofenadine), and Buscopan (hyoscine butylbromide), which are widely used for pain relief, allergies, and digestive issues.
In 2023, Opella generated €5.6 billion (US $6.1 billion) in sales, accounting for 11% of Sanofi’s overall revenue.
This move to divest Opella aligns with broader trends in the pharmaceutical industry, where major companies like Johnson & Johnson and GSK have similarly split off their consumer health divisions.
Sanofi plans to use this transition to sharpen its focus on the research and production of innovative medicines and vaccines.
The company expects its 2024 earnings per share (EPS) to grow by at least a “low-single-digit percentage,” excluding the impact of Opella’s sale.
Sanofi CEO Paul Hudson remarked, “We are confident that Opella will thrive as an independent entity, driven by a talented team and a global presence deeply rooted in France.
“CD&R has proven capabilities in the consumer sector, with a strong commitment to respecting employees, customers, and the communities they serve.”
