Sanofi wants to avoid being the first to be in the government’s spotlight. The pharmaceutical group is in the process of selling Opella, its non-prescription drug subsidiary. A hundred brands worldwide, generating 5.2 billion euros in turnover and 1.2 billion euros in margins. One of them makes this subject very sensitive: Doliprane.
The painkiller generates only 8% of its turnover, but it has two factories in France that generate just under 1,000 jobs. The government ensures their maintenance, while Sanofi has invested 20 million euros to modernise the Lisieux factory.
The two remaining candidates, the PAI and CD&R funds, are to present their takeover bids today. Sanofi will consider them on Thursday at its board of directors, but “no decision has been taken,” the group says, and it will take a few weeks to make a decision.
Advantage for the richest
The American Clayton, Dubilier & Rice (CD&R) is in first place despite being the richest. Its €26 billion fund is four times larger than that of its French rival, PAI, which is €7 billion. “CD&R has a slight advantage,” admits someone close to Sanofi, “but it is not the favourite.” The pharmaceutical group wants to hold the auction until the end.
Aware of its “disadvantage” in being American, the fund is stepping up its openness. This leaves Sanofi with the option of keeping 40%, 45% or 49% of Opella. It is also willing to discuss the governance rights that the pharmaceutical group will retain on the board of directors. “CD&R will adapt,” explains a source close to the fund. He recalls having invested in several French companies such as But, Spie or Rexel.
“There are huge cost reductions at stake!” exclaims a close friend of rival PAI, who is playing the French card. The fund is going even further to attract Sanofi. It is proposing a kind of “joint venture” in which it would hold between 51% and 49% so that the French group “can recover maximum value” when Opella is resold. It highlights the success of its Froneri joint venture, which operates with Nestlé in frozen products. Sanofi, a close friend of which assures us that the group “has no intention of co-managing Opella”, does not need to go that far. It will simply ask for seats on the board of directors, with governance rights, to influence strategic decisions.
Gulf sovereign wealth funds and Singapore
The battle is being fought over the financial dimension of the operation. The sale of Opella, for around 15 billion euros, will require the buyer to provide between 7 and 8 billion euros, half of which will come from banks. A significant investment that benefits the American fund. “CD&R has all its financing and will be able to invest alone” assures a person close to the fund. A notice sent to the PAI that it will turn to sovereign funds from the Emirates and Singapore, according to several sources. “BPI France knows them well” is intended to reassure those close to the French fund. The Abu Dhabi fund Mubadala, Qatar and the Singaporean Temasek have made several investments with the Public Investment Bank.
Because it is she who will undoubtedly be sent by the government to monitor Doliprane’s strategic interests. According to several sources, BPI has already contacted the two candidates and would consider investing around 150 million euros in Opella, although at a later stage, when Sanofi has chosen the buyer. When contacted by BPI France, it did not want to comment on our information.
Source: BFM TV
