World's Third-Largest OTC Player Sanofi's Consumer Health Unit Nears $16B Deal With Clayton Dubilier & Rice

On Friday, Sanofi SA SNY said it is negotiating with Clayton Dubilier & Rice (CD&R) to potentially sell a 50% controlling stake in Opella, its consumer healthcare business.

According to the Bloomberg report, the deal could be valued at about 15 billion euros ($16.4 billion), making it one of the largest European transactions this year. Sanofi is likely to retain a minority stake in the Opella business.

In October 2023, Sanofi announced its plans to spin off its consumer healthcare business as the French pharmaceutical company outlined its strategic update to increase investment in its drug-development pipeline and cut costs.

Sanofi said the spinoff would allow it to increase its focus on innovative medicines and vaccines.

As per a Bloomberg report, two private equity firms, Clayton Dubilier & Rice and PAI Partners, made separate bids for Sanofi’s consumer health division.

If these discussions lead to a positive outcome, any agreement would be conditional on completing the necessary social processes.

Further updates on the potential separation of Opella will be provided in due course when a decision is made.

Headquartered in France, Opella employs over 11,000 people, operates in 100 countries, and manages 13 manufacturing sites and four research and innovation centers.

With a portfolio of 100 leading brands, including Allegra, Doliprane, Novanight, Icy Hot, and Dulcolax, Opella is the world’s third-largest company in the over-the-counter and vitamins, minerals, and supplements market, serving over 500 million consumers worldwide.

Opella’s journey to independence aligns with Sanofi’s strategy to focus on innovative medicines and vaccines.

Opella already operates today as a standalone business unit within Sanofi, with dedicated R&D, production, and digital resources.

Goldman Sachs Group Inc. GS and Morgan Stanley MS said they were preparing to arrange more than $6.5 billion (6 billion euros) in debt financing for potential buyers interested in acquiring Sanofi’s consumer health division.

Last year, Sanofi initiated talks with Rothschild & Co. to explore the possibility of spinning off its consumer health division, which could potentially value the business at over $20 billion. 

Other potential bidders who circled the deal include Advent International, Blackstone Inc BX, CVC Capital Partners Plc, and TPG Inc.

Separating the consumer health unit would align Sanofi with industry peers. GSK Plc GSK and Johnson & Johnson JNJ have also divested their consumer divisions Haleon Plc 

HLN and Kenvue Inc KVUE, respectively, to focus on next-generation therapies.

Price Action: At last check on Friday, SNY stock was up 0.11% at $54.83 during the premarket session.

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