The French government has warned a US private equity firm buying the consumer healthcare arm of the drugmaker Sanofi that it faces penalties of more than €100m if it does not keep production and jobs in France.
Sanofi is splitting off Opella, which makes the paracetamol brand Doliprane, the laxative Dulcolax and other over-the-counter medicines and vitamins. However, news of talks with the New York-based Clayton, Dubilier & Rice on 11 October prompted fears about French jobs and the loss of control to a foreign company.
On Monday, Sanofi announced that it had entered exclusive negotiations with CD&R for the sale of a 50% stake in the consumer business, valuing it at €16bn. However, France’s state-owned investment bank, Bpifrance, will also take a 2% stake and a seat on Opella’s board.
France’s economy minister, Antoine Armand, said that under a trilateral agreement thrashed out with Sanofi and CD&R over the weekend, Opella’s new American owners will have to keep key factories, research, management and its 1,700 workforce in France. CD&R pledged to invest €70m in France over the next five years.
“To ensure that these guarantees are respected with the utmost rigour and firmness, [there will be] firm, immediate and far-reaching sanctions,” Armand said as he presented the deal alongside the industry minister, Marc Ferracci.
Opella would have to pay a €40m penalty if it were to stop production in its factories in Lisieux and Compiègne in northern France, which produce popular medicines such as Doliprane and drugs to treat allergy and digestion problems, over the next five years, and there is the potential to extend this requirement.
Workers at both factories have been on strike to protest against the deal since the news broke. Under the deal, Opella will have to pay a €100,000 fine for every economic-related layoff.
The agreement also requires Opella to source the active ingredient for the production of paracetamol from the French supplier Seqens under a long-term contract. Opella will have to pay €100m penalty if it breaks that promise.
Paris-listed Sanofi said it would retain a significant stake in the division but would focus on producing innovative medicines and vaccines.
Doliprane is the bestselling drug in France but production in the country became a political hot topic during the coronavirus pandemic, when shortages prompted the government under Emmanuel Macron to invest in production within the country.
From Sanofi’s point of view, the deal follows the logic of similar spin-offs by the American drug companies Johnson & Johnson and Pfizer and by Britain’s GSK, which has sold its consumer businesses to concentrate on researching and developing new drugs.
Paul Hudson, Sanofi’s British-born chief executive, said: “We chose the group with the best capabilities and people that would help us enable the long term success of the business.” He said Sanofi also welcomed Bpifrance “as a supporter of Opella’s development journey”.
