Private equity firms ‘eyeing $20bn for Sanofi consumer unit’

Private equity firms Bain Capital and Cinven are reported to be considering a bid for Sanofi’s consumer health business, according to Bloomberg.

Citing people familiar with the matter, the news service suggests that Advent International is also discussing a combined bid with other investors for the business, which has been valued at around $20 billion. Advent is talking with the Abu Dhabi Investment Authority on a bid, it reports, while French state investment firm Bpifrance is also exploring a possible investment.

Sanofi said last October that it was planning to spin off its consumer health business into a separate company before the end of this year and focus its efforts on its prescription drugs business. It has also started streamlining the range of products offered by the unit ahead of the separation.

The consumer health unit – which owns brands like allergy therapies Allegra and Xyzal, irritable bowel syndrome product Buscopan, painkiller Doliprane, and Pharmaton dietary supplement – has been operating as a standalone business since 2020 and made revenues of €5.2 billion ($5.6 billion) last year.

In Sanofi’s first-quarter update, Sanofi’s chief financial officer, Francois Roger, said that the company was looking at a spin-off via an initial public offering (IPO), “probably partnering as well with private equity.”

He also said that proceeds from the sale would be used – at least in part – to drive organic and inorganic growth at Sanofi, potentially including ‘bolt-on’ pipeline-boosting deals in the €2 billion to €5 billion range.

According to Bloomberg, Sanofi's chief executive, Paul Hudson, said that the company is talking to multiple interested parties, with a capital markets option available to the company, too, suggesting it has seen “a huge amount of interest” in the business.

Sanofi’s divestment continues a trend among pharma companies to divest their consumer health divisions to focus on prescription drugs, recognising that consumer health products require different skills and talent closer to that of fast-moving consumer goods (FMCG) companies.

It is following in the footsteps of GSK/Pfizer, Johnson & Johnson, Merck KGaA, Ipsen, and others. One hold-out is Bayer, which has also come under pressure from investors to hive off its unit, but so far has not committed to such a move.