Sanofi is out another potential buyer for its European generics business, according to India's Business Standard, as Torrent Pharmaceuticals bowed out of an auction for a unit that could fetch €2 billion.
Like private equity firm Nordic Capital, the Indian generic drugmaker was worried about shelling out so much for the business, the publication reported. The generics drugmaker also didn't want to take on too much debt to fund the purchase.
Sanofi's Zentiva, which operates in 50 countries and sells drugs in disease areas including cardiovascular, central nervous system, gastrointestinal and metabolic disorders, could pull in €2 billion, or around $2.5 billion, according to reports. Sanofi initially bought the business back in 2008 for €1.8 billion, worth about $2.6 billion at the time.
Last month, the Financial Times reported that European PE firm Nordic Capital bowed out of the auction because it was too rich. Previously, the newspaper said Sanofi shortlisted its potential buyers to Torrent, Brazilian drugmaker EMS and a few other PE firms.
For its part, Sanofi said it hopes to sign a deal to sell the business by the third quarter. The company started talking about selling its European generics business way back in 2015.
The deal talks come as Sanofi continues to transform under CEO Olivier Brandicourt, who came on board in 2015 and has worked to zero in on five global business units. He aims to save €1.5 billion in annual costs along the way.
The following year, Brandicourt offloaded Sanofi's animal health unit Merial in an asset swap with Boehringer Ingelheim, getting BI's consumer health business in return.
But Brandicourt hasn't just slimmed down. Sanofi this year picked up nanobody biotech Ablynx for $4.8 billion and hemophilia-focused Bioverativ for $11.6 billion. The CEO recently said the acquisitions "dramatically reshape our portfolio in specialty care" and boost the company's R&D presence.
As for bigger buys, Sanofi lost out in pursuits of Actelion and Medivation last year, as those companies sold to Johnson & Johnson and Pfizer, respectively.