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French Drug Giant Sanofi in Talks to sell Generics Business to Advent

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Published on : Apr 18, 2018

The French multinational pharmaceutical company, Sanofi S.A., is considering strategic moves in generics business in a bid to simplify its business operations and consolidate its pipeline. The French pharmaceutical giant announced on April 17, 2018 that it has entered into exclusive talks to sell its generics arm Zentiva to a U.S.-based private equity firm Advent International. The negotiation to sell its European generics drugs arm is valued at a decent 1.9 billion euros ($2.4 billion). The selling price that includes equity and debt is expected to be over by this year end, after making internal consultations and securing the necessary regulatory approval. The French drugmaker states that Advent has made a binding offer to buy its generic arm.

Proceeds to be used for Further Pharmaceutical and Biotechnology Acquisitions

Over the recent few months, Sanofi has been actively involved in mergers and acquisitions as well as mulling selling its assets, in a broader move to reshape its business. Of note, the drugmaker earlier this year struck a deal to buy biotechnology Ablynx and spent over US$16 billion for this, which followed its deal to buy U.S. biotechnology company Bioverativ Inc. According to experts familiar with the matter, the proceeds will be likely used to make further pharmaceutical and biotechnology acquisitions.

Buying Zentiva to enable Advent International to gain Competitive Edge in Generic Pharmaceutical Sector

For the investment firm Advent, the generics arm Zentiva has been potentially attractive business in the generic pharmaceutical sector. The sector is responsible for churning out medicines that more patents can afford and benefit from the high quality treatments. According to Sanofi Chief Executive, transferring its business will ensure its long-term growth and success.

Zentiva has presence in around 50 markets, with a robust presence in Eastern Europe. Its portfolio is broad and includes cardiovascular and gastrointestinal drugs, apart from common painkillers and anti-inflammatory formulations. The Paris-headquartered Sanofi has been planning to sell its generic business unit since October last year.