- French drugmaker Sanofi SA is in talks to sell its EU generic drugs unit to private equity firm Advent International Corp. for nearly $2.4 billion, aiming to slim its presence in the copycat medicine business at a time when falling prices have battered bottom lines across the industry.
- "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 Sanofi CEO Olivier Brandicourt in an April 17 statement.
- Advent's offer is binding and fully financed, according to the companies. Pending review and regulatory approval, the deal is expected to close by the end of the year.
Sanofi has been exploring options for its European generics unit, known as Zentiva, since late 2015, when the company rolled out a "strategic roadmap" to reshape its business.
That review solidified into a decision to carve out the business through a sale, leading to the current exclusive talks with Advent.
At €1.9 billion, Advent's offer would represent roughly 2.5 times the €760 million Sanofi earned in Europe from generic sales last year. Revenues have slowly declined, ebbing 4.9% year-over-year in 2017.
European generic sales represented about 43% of Sanofi's total 2017 revenues from the knockoff medicines.
Sanofi has said it remains committed to generic drugs elsewhere in the world. But the drugmaker faces weakening sales in emerging markets as well, reporting a 2.4% slide in revenues last year.
Across the industry, generic drugmakers face rising competition and declining prices — a two-sided threat that has significantly weighed on the fortunes of large companies like Teva Pharmaceutical Industries Ltd. and Mylan NV.
If the deal with Sanofi goes through, Advent said it will work with the pharma to form Zentiva into an "independent operation."