Sanofi said to be weighing options for consumer healthcare business

People familiar with the matter suggested on Thursday that Sanofi is considering options for its consumer healthcare business ahead of a strategy update from new CEO Paul Hudson on December 10. "Sanofi is looking at various options, joint venture, initial public offering (IPO), sale… They are talking to investments banks about options but have not taken a decision," one source said.

Hudson assumed the role of chief executive on September 1, taking over from Olivier Brandicourt, later announcing that an update on Sanofi's strategy would be detailed before the end of the year. At the time, Hudson remarked "prioritisation will become increasingly important going forward," adding "the reality in business is that some things are more important than others and we have to understand where we must win."

The consumer healthcare business generated sales of €4.7 billion ($5.2 billion) last year, with sources suggesting that an IPO could be worth around $30 billion. One of the people noted that forming a consumer healthcare joint venture with another company would allow Sanofi to benefit from cost cuts, potentially leading to a higher valuation in a possible IPO or sale at a later date. However, the sources cautioned that the drugmaker has not yet made a decision regarding the consumer healthcare division and could choose to retain the unit.

Commenting on the rumour, Daniel Mahony of Polar Capital suggested that splitting off the consumer healthcare unit would send a positive signal about Sanofi's ability to develop a new raft of prescription drugs. Mahony said a stand-alone consumer healthcare business would also be attractive, adding "when you let it loose, it can invest in itself."

Sanofi bulked up its consumer healthcare operations in 2017 via an asset swap deal with Boehringer Ingelheim, which saw the French company's Merial animal health unit transferred to the German firm.

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