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Sanofi Negotiating Exclusively With CD&R for Opella 50% Stake Sale
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Sanofi (SNY - Free Report) has entered into exclusive negotiations with U.S.-based private equity company Clayton Dubilier & Rice (CD&R) for the potential sale of a 50% controlling stake in its consumer healthcare (CHC) business unit, Opella.
Per the terms of the deal, Sanofi will remain a significant shareholder of Opella. In addition, the French investment bank, Bpifrance, is likely to hold a 2% stake and become a minority shareholder in Opella.
The transaction is expected to close at the earliest in the second quarter of 2025, subject to customary statutory approvals. CD&R’s offer is binding and fully financed.
The deal would allow SNY to focus on its core pharmaceutical business.
Year to date, shares of Sanofi have increased 10.5% compared with the industry’s rally of 20.6%.
Image Source: Zacks Investment Research
More on SNY's Latest Transaction
Sanofi announced its intention to separate its CHC unit last year through the creation of a publicly listed entity called Opella. Earlier this month, the company said that it is in negotiations with CD&R for the potential sale of the controlling stake in Opella.
Opella is headquartered in Paris and has an employee count of more than 11,000 people. With an enterprise value of almost €16 billion, or 14 times EBITDA for 2024, Opella’s current portfolio of products includes brands such as Allegra, Doliprane and Dulcolax.
The above transaction will classify Opella’s business as discontinued operations. Starting from the fourth quarter of 2024, the profit or loss from the Opella business unit will be recorded in “net results from discontinued operations” in Sanofi’s income statement till the transaction is closed.
Net income from SNY’s business, which is used for calculating the earnings per share (EPS), is based on the continuing operations, excluding the discontinued Opella business.
Sanofi is eligible to receive a cash payment following the close of the above transaction in the second quarter of 2025. The proceeds from the sale would be used in capital allocation, including shareholder returns.
SNY Updates EPS Guidance
Under the latest development (excluding the Opella business), Sanofi expects its EPS to grow by at least a low-single-digit percentage at a constant exchange rate (CER) in 2024.
Previously, Sanofi expected its earnings to be stable at CER, which was announced in July.
Including Opella, it would have increased its earnings growth expectations to be between a stable and low single-digit percentage from previous expectations of being stable.
If all goes well and the separation of the consumer health unit is completed, Sanofi will join the likes of other large drugmakers like J&J (JNJ - Free Report) , GSK plc (GSK - Free Report) and Pfizer (PFE - Free Report) , which have also sold off their consumer health units to focus on their core pharmaceuticals business.
In August 2023, J&J separated its Consumer Health business into a newly listed company called Kenvue, which now operates as a separate and fully independent company.
With the complete separation of the Consumer Health segment, J&J has now become a two-sector company focused on the Pharmaceutical and MedTech fields.
In August 2019, GSK and Pfizer merged their consumer healthcare unit into a new joint venture.
However, GSK demerged its CHC segment into a standalone company in 2022. The independent company was named Haleon.
Image: Bigstock
Sanofi Negotiating Exclusively With CD&R for Opella 50% Stake Sale
Sanofi (SNY - Free Report) has entered into exclusive negotiations with U.S.-based private equity company Clayton Dubilier & Rice (CD&R) for the potential sale of a 50% controlling stake in its consumer healthcare (CHC) business unit, Opella.
Per the terms of the deal, Sanofi will remain a significant shareholder of Opella. In addition, the French investment bank, Bpifrance, is likely to hold a 2% stake and become a minority shareholder in Opella.
The transaction is expected to close at the earliest in the second quarter of 2025, subject to customary statutory approvals. CD&R’s offer is binding and fully financed.
The deal would allow SNY to focus on its core pharmaceutical business.
Year to date, shares of Sanofi have increased 10.5% compared with the industry’s rally of 20.6%.
Image Source: Zacks Investment Research
More on SNY's Latest Transaction
Sanofi announced its intention to separate its CHC unit last year through the creation of a publicly listed entity called Opella. Earlier this month, the company said that it is in negotiations with CD&R for the potential sale of the controlling stake in Opella.
Opella is headquartered in Paris and has an employee count of more than 11,000 people. With an enterprise value of almost €16 billion, or 14 times EBITDA for 2024, Opella’s current portfolio of products includes brands such as Allegra, Doliprane and Dulcolax.
The above transaction will classify Opella’s business as discontinued operations. Starting from the fourth quarter of 2024, the profit or loss from the Opella business unit will be recorded in “net results from discontinued operations” in Sanofi’s income statement till the transaction is closed.
Net income from SNY’s business, which is used for calculating the earnings per share (EPS), is based on the continuing operations, excluding the discontinued Opella business.
Sanofi is eligible to receive a cash payment following the close of the above transaction in the second quarter of 2025. The proceeds from the sale would be used in capital allocation, including shareholder returns.
SNY Updates EPS Guidance
Under the latest development (excluding the Opella business), Sanofi expects its EPS to grow by at least a low-single-digit percentage at a constant exchange rate (CER) in 2024.
Previously, Sanofi expected its earnings to be stable at CER, which was announced in July.
Including Opella, it would have increased its earnings growth expectations to be between a stable and low single-digit percentage from previous expectations of being stable.
If all goes well and the separation of the consumer health unit is completed, Sanofi will join the likes of other large drugmakers like J&J (JNJ - Free Report) , GSK plc (GSK - Free Report) and Pfizer (PFE - Free Report) , which have also sold off their consumer health units to focus on their core pharmaceuticals business.
In August 2023, J&J separated its Consumer Health business into a newly listed company called Kenvue, which now operates as a separate and fully independent company.
With the complete separation of the Consumer Health segment, J&J has now become a two-sector company focused on the Pharmaceutical and MedTech fields.
In August 2019, GSK and Pfizer merged their consumer healthcare unit into a new joint venture.
However, GSK demerged its CHC segment into a standalone company in 2022. The independent company was named Haleon.
PFE still holds a stake in Haleon.
SNY's Zacks Rank
Sanofi currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.