Fexofenadine Hydrochloride

Opella is well-known in France for manufacturing the painkiller Doliprane. Image credit: Shutterstock / Leitenberger Photography. Sanofi’s sale of its $17bn consumer health business Opella just advanced a step closer, after the drugmaker signed a share purchase agreement with buyer Clayton Dubilier & Rice (CD&R). The two companies agreed on the transaction that will see Sanofi hand over a 50% controlling stake of Opella to US private equity CD&R. French public investment bank Bpifrance is expected to participate as a minority shareholder with a 2% stake in the health business. Sanofi, which will remain a significant shareholder, said the deal is expected to take place in Q2 2025 at the earliest, with customary regulatory approvals still required. The share purchase agreement is the first public update on the deal since Sanofi entered exclusive talks with CD&R in October 2024. At the time, the French pharma company placed an enterprise value of €16bn ($17bn) on Opella, around 14 times the estimated core earnings (EBITDA) for 2024. The decision to divest Opella is part of Sanofi’s ongoing strategy to become a pureplay biopharma company. Opella employs more than 11,000 people worldwide and is known for making Doliprane, one of France’s most-sold paracetamol-based painkillers. The medicine is so popular that most paracetamol products are referred to as Doliprane, regardless of the manufacturer. In addition, Opella develops allergy treatment Allegra (fexofenadine) and irritable bowel syndrome (IBS) relief medicine Buscopan (hyoscine butylbromide), among others. Sales in the business totalled €5.6bn ($5.8bn) in 2023, accounting for 11% of Sanofi’s total business. Sanofi also claims Opella is also the third-largest business in the world in the over-the-counter vitamins, minerals, and supplements market. Given Opella’s significant economic contribution to France, Sanofi’s divestment prompted concerns in the country about the potential loss of a strategic asset to a US company. The Bpifrance stake is part of a guarantee from the French Government to keep jobs and production in the country. Sanofi honing its focus on innovative medicines and vaccines while shedding its consumer health business is not unique. Johnson & Johnson (J&J) and GSK both made the same play in 2022, creating independent consumer healthcare businesses Kenvue and Haleon, respectively. Opella is not the only big business decision recently made by Sanofi, as it has been busy increasing its ownership and reducing stakes held by investors. Earlier this month, Sanofi bought back a $3.1bn stake held by cosmetics giant L’Oréal, cutting the latter company’s ownership. In addition, Sanofi agreed to purchase a further $2.08bn in shares held by other stakeholders.

Sanofi is currently in "exclusive talks" with U.S. private equity firm Clayton, Dubilier & Rice (CD&R) to sell a 50% controlling stake in its consumer healthcare business Opella. The French government has confirmed a commitment from CD&R, based in New York, to ensure that Opella's production facilities in France will remain intact and that there will be no disruption to the supply of drugs to the country, removing a potential obstacle to the deal. Sanofi said the proposed deal valued Opella at 16 billion euros and stressed that CD&R's offer for a 50 percent stake was "binding and fully funded." In addition, French public sector investment bank Bpifrance plans to buy a 2% stake in Opella and take a seat on its board. The deal, expected to close "at the earliest" in the second quarter of next year, will see Sanofi step up its investment in innovative drugs and vaccines and mark the French drugmaker's formal joining the ranks of biopharmaceutical giants Johnson & Johnson, Pfizer and GlaxoSmithKline. "With this transaction, Sanofi will be able to focus even more on providing innovative treatments for patients suffering from debilitating or fatal diseases and viruses, such as RSV, COPD or multiple sclerosis," Sanofi CEO Paul Hudson said in a press release. Analysts at ODDO BHF supported the decision, arguing that a divestiture or partial divestiture of the consumer business would allow Sanofi to reallocate capital to research and business development, and recommended that Sanofi use some of the capital to offset the financial impact of the divestiture through share buybacks. Hudson first floated the idea of spinning off the consumer health division last October. Since then, CD&R and PAI Partners, another private equity giant, have made separate bids for Opella. Earlier this month, Reuters reported that CD&R had made a formal offer to buy 50 percent of Opella's consumer healthcare business. Last week, Sanofi said it was surprised by PAI's move to raise its 200 million euro offer after the deadline. Sanofi's commitment that Opella would continue to operate in France followed a call by French unions for workers to strike on Thursday in protest at the deal. Opella is a leader in over-the-counter medicines, vitamins, minerals and supplements. Its product line includes the well-known antihistamine Allegra, non-opioid painkiller Doliprane, stomach cramping relief Buscopan, Selsun Blue shampoo, and pain treatments Icy Hot and Gold Bond, among others. Opella employs 11,000 people in 100 countries and generated sales of 5.2 billion euros ($5.6 billion) in 2023, accounting for 11% of Sanofi's total revenue. In addition, the company operates 13 production sites and four research and development innovation centers.