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Sanofi mulls options for consumer healthcare arm: Bloomberg
Posted on Thursday, 21 November 2019 12:53
Sanofi has been talking to financial advisors about potential options for its consumer healthcare arm that include a spin-off or a merger, as well as maintaining the status quo to retain a more diversified revenue stream, Bloomberg reported.
People with knowledge of the process told the news provider the deliberations are in the early stages and there is no guarantee they would result in a transaction, which may value the business at USD 30.00 billion.
The review is part of Paul Hudson’s decision to cast a critical eye over all of Sanofi’s operations, with a view to updating the market on the strategy on 10th December.
Bloomberg added the chief executive, the new head of research and chief of finance are also weighing the future of the diabetes unit, the group’s pipeline priorities and its acquisition programme.
In a note cited by the news provider, Morgan Stanley analysts said spinning off the consumer healthcare operations could unlock as much as EUR 8.00 apiece of trapped value.
Separately, Daniel Mahony of Polar Capital told Bloomberg in a telephone interview such a move could be a show of confidence and send positive signals to the market about Sanofi’s investment capabilities.
The news provider noted spinning off the arm would free up the group to accelerate its presence in fast-growing areas like oncology and gene therapy.
Sanofi’s consumer healthcare arm is focused on four strategic categories: allergy, cough and cold; pain; digestive; and nutritional.
The unit’s products include Allegra, the over-the-counter antihistamine sold in more than 80 countries globally, Buscopan, Dulcolax and the Australian brand Nature’s Own.
It generated revenue of EUR 4.66 billion in the 12 months ended 31st December 2018, which represented 13.5 per cent of Sanofi’s net sales for the year, and EUR 2.40 billion in H1 2019 (14.1 per cent of the group’s total net sales in H1 2019).
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