France warns of penalties if Opella production goes offshore
Sanofi is now in exclusive talks with private equity company Clayton Dubilier & Rice over the sale of a controlling stake in its consumer health business Opella, as the French government seeks to guarantee it will keep production and jobs in France.
Earlier this month, Sanofi revealed talks were ongoing with CD&R, and has now confirmed the negotiations could result in the sale of a 50% controlling stake in Opella, which it has valued at around €16 billion ($17.3 billion). An offer is now on the table that is "binding and fully financed," according to a company statement.
Almost immediately, the French economy minister, Antoine Armand went on record saying the deal included a commitment to keep the bulk of Opella's manufacturing, R&D, management, and 1,700-strong workforce in France, along with a commitment by CD&R of investing €70 million in the country over the next five years.
Failure to meet those commitments will result in "immediate and far-reaching sanctions," said Armand at a press conference intended to reassure worried workers – who have been on strike since the deal was first announced – and try to fend off a political backlash against the deal.
Among the penalties is a €40 million fine if Opella stops making its products at two facilities in Lisieux and Compiègne and €100,000 for each layoff that takes place for economic reasons. To help reinforce its stance and keep tabs on the company, France is expected to take a minority stake in Opella of around 2%, according to a report in The Guardian.
Adding to the anxiety within France is that CD&R appears to have outbid a consortium led by French private equity firm PAI Partners, which was viewed as a preferred bidder that would reduce the risks of downsizing within France.
Opella owns brands like allergy therapies Allegra and Xyzal, irritable bowel syndrome product Buscopan, painkiller Doliprane, and Pharmaton dietary supplements, and employs around 11,000 people worldwide. Sanofi said that the deal with CD&R would "support Opella's growth strategy as a pure-play, global, and fast-moving consumer healthcare company."
Sanofi said in October last year that it was planning to spin off Opella into a separate company before the end of 2024 to focus its efforts on its prescription drugs business. It has been operating as a standalone business since 2020 and made revenues of €2.8 billion in the first six months of this year, up more than 9% on the same period of 2023.
