It finally appears to be go-time in Sanofi’s continuing effort to separate from its consumer health unit.
The French drugmaker has told interested parties to provide buyout bids for its consumer division by the middle of July, Bloomberg reports, citing sources familiar with the discussions.
Private equity firms Advent International of Boston and PAI Partners of Paris are believed to be the most serious potential suitors, according to Bloomberg's report. CVC Capital Partners of Luxembourg and U.S. firms Blackstone, TPG and Clayton, Dubilier & Rice are vying as well, with Swedish investor EQT AB no longer in the mix, the report said.
In February, Bloomberg reported that several of the companies had shown interest in acquiring the unit, which is valued at roughly $20 billion.
A Sanofi spokesperson said via email that the company doesn't comment on "market rumors," but pointed to an announcement in October of 2023 where the company said it intended to create a standalone company as early as the fourth quarter of 2024. The independent consumer firm would be publicly listed and headquartered in Paris.
While laying out this plan then, Sanofi noted that its “most likely” pathway to achieve the separation would be through a capital markets transaction, with Sanofi retaining a significant minority stake in the new company.
"Preparation for this potential separation project is progressing," the spokesperson wrote on Wednesday. "We are keeping all options open to maximize value creation for all our stakeholders."
Selling noted brands such as Allegra allergy pills, Gold Bond talcum powder, Icy Hot muscle pain reliever and Selsun Blue shampoo, Sanofi’s consumer unit generated sales of 5.2 billion euros ($5.6 billion) in 2023, which represented 11% of the company’s total revenue.
In its effort to divest, Sanofi is following the lead of others in the industry such as Johnson & Johnson, GSK, Pfizer and Novartis. Each of the pharma giants has gotten out of the consumer health business to concentrate on the development and commercialization of prescription drugs. In the case of Sanofi, its core specialties are vaccines and immunology treatments.
Sanofi’s push to divest began in 2019 with the hiring of Paul Hudson as CEO. Soon after Hudson took over, he reorganized, leaving consumer healthcare to operate as a standalone business unit.
In 2021, Sanofi sold off 16 consumer health brands to Germany’s Stada Arzneimittel. Then last year, Stada purchased several other brands.
In October of last year, Hudson touted the “streamlining” of the company’s consumer healthcare product portfolio “to focus on priority brands,” as one of the successes of his Play to Win strategy.