Sanofi in talks to sell stake in consumer health spinout

Rumours that Sanofi was in discussion with private equity groups over the sale of its consumer health business Opella have been confirmed – at least partially.

The French pharma group confirmed this morning that it has entered into talks with US-based Clayton Dubilier & Rice to sell a controlling 50% stake in the unit for what has been estimated by Reuters to be in the region of €15 billion ($16.4 billion).

Previously, other private equity groups including Bain Capital, Cinven, and Advent International had been linked to a possible $20 billion sale for the entire business, which owns brands like allergy therapies Allegra and Xyzal, irritable bowel syndrome product Buscopan, painkiller Doliprane, and Pharmaton dietary supplements. And last month Bloomberg said Sanofi had also received bids from CD&R, as well as from PAI Partners.

Sanofi said in October last year that it was planning to spin off its consumer health business into a separate company before the end of 2024 in order to focus its efforts on its prescription drugs business. Earlier this year, it said it was considering an initial public offering for the business, "probably partnering as well with private equity."

In a statement, the company said: "Should these discussions lead to a positive outcome, any agreement would be subject to the completion of the necessary social processes. Further updates on the potential separation of Opella will be provided in due course, when a decision is made."

Opella has been operating as a standalone business since 2020 and made revenues of €2.8 billion ($3.1 billion) in the first six months of this year, up more than 9% on the same period of 2023. It accounts for around 13% of Sanofi's total revenues and is reported to be the world's third-largest company in the over-the-counter medicines and vitamins, minerals, and supplements (VMS) market.

It employs over 11,000 people across 100 countries, with 13 manufacturing sites and four R&D centres, with a portfolio of 100 brands.

French media reports say that the country's Ministry of Economy, Finance, and Industry has lent its support to a possible transaction with CD&R, saying it is a "serious" investment partner and that it does not expect the deal will risk the transfer of production and other activities outside France.