(News Bulletin 247) – Several investment funds would be interested in the consumer branch that Sanofi intends to put on the stock market, in the fourth quarter “at the earliest”, reports Bloomberg.

Sanofi’s “consumer health” division arouses desire. This division bringing together non-prescription drugs such as Doliprane from the French pharmaceutical giant would be in the sights of large investment funds, Bloomberg reported on Tuesday.

According to the financial press agency citing sources close to the matter, an audience of big names in private equity such as Blackstone, EQT, Advent International, Bain Capital, CVC Capital Partners and even KKR would be interested in a takeover of this division which could be valued at more than $20 billion.

A confirmed valuation

This valuation would have been confirmed by a recent report carried out by JPMorgan which valued this division at around 20 billion dollars, recalls Invest Securities in its note devoted to these market rumors.

Negotiations are still at an early stage, with no guarantee that they will result in formal takeover proposals, Bloomberg also indicates. Questioned by the American press agency, Sanofi did not wish to comment on this information.

Remember that at the end of October, Sanofi announced that it wanted to separate from this branch, through an IPO.

“Sanofi is studying possible separation scenarios, but believes that the route most likely to be taken would be that of an operation on the capital markets through the creation of a listed company whose headquarters would be in Paris,” the group then indicated during this announcement.

At the beginning of February, Sanofi had refined the timetable for the IPO of this division. The company had indicated that it was aiming for an IPO in the fourth quarter of 2024 at the earliest, compared to “from the fourth quarter of 2024” in its initial plan.

In mid-November, Bloomberg had already revealed discussions between Sanofi and the investment bank Rothschild. The latter would have been mandated by the French pharmaceutical giant to support it in its project of demerger and separate listing of its “consumer health” activity.

One less IPO in Paris?

Will these multiple expressions of interest push the French pharmaceutical giant to change gear? For Invest Securties, Sanofi “should probably reconsider its plans”.

According to the financial intermediary, the sale of the OTC (non-prescription medicines) division rather than a stock market listing would be “a winning operation for Sanofi in the short term”.

“Indeed, rumors of a potential buyout at a valuation level of $20 billion could allow the group to deploy its very ambitious R&D investment strategy without unduly reducing net earnings per share for the next few years such as ‘announced at the end of 2023”, also says Invest Securities.

For Sanofi, this option would therefore be profitable for it to have the financial basis necessary for the development of new innovative drugs, as announced in its new strategic plan “Play to Win”, at the end of last October.

“This strategy remains focused on its essential objectives: the launch of innovative drugs and vaccines, an agile and efficient deployment of resources and the improvement of R&D productivity,” the group explained at the time. Except that these investments must be financed. And this $20 billion could be welcome for Sanofi to roll out this plan.

On the other hand, for the Paris Stock Exchange, this would be bad news. It would be one less contender for a renewal of the rating which is visibly dwindling. For the moment, of the numerous demerger-introduction projects announced for this year, only Sodexo has gone through with the listing of Pluxee, its restaurant vouchers division.