In a significant move, Sanofi SA (SNY) and private equity firm Clayton Dubilier & Rice (CD&R) have entered exclusive negotiations for the potential sale of a 50% controlling stake in Opella, Sanofi’s consumer health unit. This deal, valued at approximately €16 billion ($17.36 billion), marks a major step towards establishing Opella as an independent player in the consumer healthcare industry.
Sanofi’s strategic decision to divest its consumer health unit aligns with its broader focus on innovation and growth in the pharmaceuticals and vaccines sectors. While Sanofi will remain a substantial shareholder in Opella, the transaction signifies a clear shift in the company’s portfolio priorities.
The deal, which is expected to close in the second quarter of 2025, has garnered significant attention in the industry. Opella, headquartered in France, boasts a strong presence in the global consumer health market, employing over 11,000 people across 100 countries. With a portfolio of popular brands like Allegra, Doliprane, and Dulcolax, Opella ranks as the third-largest player in the over-the-counter (OTC) and vitamins, minerals, and supplements (VMS) market, serving over half a billion consumers globally.
Opella’s operations are rooted in a rapidly growing industry, fueled by long-term trends such as an aging population, rising income levels, and increasing health and well-being awareness. The valuation of €16 billion, translating to approximately 14 times the estimated 2024 EBITDA, underscores the attractiveness of Opella’s business model.
CD&R’s bid, which is binding and fully financed, emerged victorious after a competitive bidding process that included another French private equity firm, PAI Partners. PAI, in a bid to secure the deal, had reportedly increased its offer by around €200 million ($217.12 million). However, despite PAI’s partnership with Singapore’s GIC and the Abu Dhabi Investment Authority, their bid ultimately fell short due to CD&R’s superior financial capacity, evidenced by their record €26 billion fundraising last year.
The proposed transaction will have a significant impact on Sanofi’s financial performance. Excluding Opella, the company anticipates preliminary business EPS in 2023 to be €7.25. For 2024, Sanofi expects its business EPS to grow at a low-single-digit percentage, while a strong rebound in business EPS is anticipated in 2025, both under the previous and new scopes.
This strategic maneuver by Sanofi, as well as the competitive bidding process, highlights the ongoing dynamic within the consumer health market. As the industry continues to evolve, driven by changing demographics, consumer preferences, and advancements in healthcare, this transaction is likely to set the stage for further consolidation and innovation in the sector.