France-based Sanofi S.A. (FR:SAN) is exploring the sale of its stake in its Consumer Health unit to an American private equity firm CD&R (Clayton, Dubilier & Rice). Following a report by Reuters, the company today confirmed its negotiations with CD&R for a 50% controlling interest in Opella, its consumer healthcare division. Sanofi shares were down 0.42% as of this writing.
Sanofi is a global pharmaceutical company that provides a wide range of medicines and vaccines.
Sanofi Negotiates Deal for Half of Opella
Opella manages 13 manufacturing sites, with a portfolio of 100 popular consumer-oriented brands like Allegra, Doliprane, Novanight, Icy Hot, and Dulcolax. Currently, Opella functions as a separate business unit within Sanofi, equipped with its resources for R&D, production, and digital initiatives.
Opella achieved 6.3% sales growth at constant exchange rates (CER) in 2023. In the second quarter results for 2024, Opella sales grew 9.6% at CER, reaching €1.3 billion.
Opella’s spin-off supports Sanofi’s plan to concentrate on its core business. With this deal, Sanofi aims to ramp up investment in the development of innovative medicines and vaccines.
Sanofi initially announced that it was considering various options for separating its consumer healthcare business in October 2023. The company also dropped its 2025 profit target as part of a plan to list its consumer healthcare division and concentrate on its core pharmaceuticals. This led to a massive fall in its share price, which took almost a year to recover. Year-to-date, SAN stock has gained 10.5%.
Is Sanofi Stock a Good Buy?
As per TipRanks’ consensus, SAN stock has received a Moderate Buy rating, backed by 10 Buys, three Holds, and one Sell recommendation. The average Sanofi share price target is €113, which is 12.26% above the current trading levels.
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