Sanofi enters into negotiations to sell its European generics unit
Sanofi and Advent International have entered into exclusive negotiations under which Advent would acquire Zentiva, Sanofi’s European generics business for €1.9 bn.
The company will aim to work in collaboration with Sanofi to form a new independent operation and support the Zentiva management team by investing in the company’s operations, production facilities and R&D pipeline.
“Following a comprehensive review of strategic options for our generic unit in Europe, we have determined that transferring this business to Advent is the best option to ensure its long-term success,” said Olivier Brandicourt, Chief Executive Officer, Sanofi.
“We have long been attracted to the generics pharmaceutical sector as it enables more people to access high quality treatments by lowering their cost. We believe that Zentiva is a great platform, full of talented people, who we can invest behind to build a new, independent, European generics leader” jointly commented Tom Allen, Managing Director and co-head of Advent International’s European Healthcare team and Cédric Chateau, Managing Director and head of Advent International in France.
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Headquartered in Prague, Zentiva reaches over 40mn patients in 25 European countries. Its integrated value chain and pan-European commercial footprint makes it one of the largest generics players in Europe.
The transaction is expected to close by the end of 2018.
“The sale price for Zentiva is decent, but nothing that extraordinary,” commented Jerome Schupp, fund manager at Geneva-based Prime Partners.
“Sanofi will probably re-invest the proceeds in looking to make pharma or biotech acquisitions. They are looking to strengthen their pipeline, which is a bit weak at the moment.”
Sanofi has undergone a number of mergers and acquisitions. From its $11.6bn deal to acquire Bioverativ, as well as its $4.8bn takeover of Ablynx, the company is looking at further markets where it views long-term value.
Whilst the European generic drugs market continues to grow, fierce competition and escalating healthcare costs globally are causing shares to remain volatile, further impacting sales.
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