Sanofi has received a binding offer from a US private equity firm, Clayton, Dubilier & Rice (CD&R), for the proposed acquisition of a 50% controlling interest in its consumer healthcare arm, Opella. Ongoing negotiations have reached an exclusivity agreement between Sanofi and CD&R, as they explore the potential transaction which is currently under government scrutiny.
The enterprise value of Opella has been assessed at 16 billion euros, as detailed in a recent release. The French pharmaceutical giant anticipates that state investment bank Bpifrance will also participate in the deal, taking on a 2% shareholder stake, thereby ensuring the involvement of the French government on Opella's board.
Barclays commented on the situation, noting that the sale process of Opella has not significantly captured the attention of Sanofi investors as of October 16, especially considering Sanofi's confirmation of negotiations regarding the sale of the controlling stake. The market appears to be wary, with concerns that increased governmental focus may elevate the risk associated with selling the stake. To address these concerns, Sanofi stated that exclusive discussions revolve around Opella's status as a global consumer healthcare business headquartered in France.
Sanofi believes this potential sale will enable the company to sharpen its focus on vaccines and innovative treatments for serious conditions like RSV and multiple sclerosis, while retaining a minority interest in Opella. Opella boasts a global presence with operations in 100 countries, supported by 13 strategic manufacturing facilities and four dedicated science and innovation development centers.
Notably known for producing consumer medications such as Allegra and Doliprane, Opella stands as the third-largest player in the global market for over-the-counter products, vitamins, minerals, and supplements. Sanofi asserts that CD&R's investment will empower Opella's journey toward becoming a standalone, specialized consumer healthcare entity. Eric Rouzier, a partner and head of European healthcare at CD&R, emphasized the substantial opportunities to elevate Opella's status as a market leader.
By leveraging extensive industry expertise, a well-connected operational network, and the necessary capital resources, CD&R intends to position Opella for accelerated growth. Rouzier expressed enthusiasm about bolstering Opella's French operations, including its vital manufacturing capabilities and cutting-edge R&D facilities, while enhancing its global platform to better serve employees, consumers, and patients alike. Pending the finalization of definitive agreements, social processes, and statutory approvals, this potential sale may reach completion as early as the second quarter of 2025.
Sanofi has outlined that proceeds from the transaction will be allocated towards organic investments, mergers and acquisitions, anti-dilutive share buybacks, and dividend growth. As Opella's business will be categorized as discontinued post-sale, Sanofi's preliminary projected earnings per share (EPS) in 2024 is anticipated to increase by a low-single-digit percentage at constant exchange rates compared to a forecast of 7.25 euros in 2023.
For 2025, Sanofi maintains a positive outlook with expectations of a robust recovery in business EPS. In trading, Sanofi's stock declined by nearly 1% during midmorning activity, with the price standing at $100.54, reflecting a change of $-0.28 and a percent change of -0.28%..