Sanofi set to sell European generics business Zentiva for 1.9 billion euros

Sanofi announced Tuesday that it entered exclusive negotiations to sell its European generics business Zentiva to private equity firm Advent International for 1.9 billion euros ($2.4 billion). The drugmaker, which is looking to divest the unit as part of its strategy to simplify and reshape the company, noted that Advent's offer is firm, binding and fully financed.

"Following a comprehensive review of strategic options for our generics unit in Europe, we have determined that transferring this business to Advent is the best option to ensure its long-term success," remarked Sanofi CEO Olivier Brandicourt. In 2016, the company revealed plans to divest its European generics business within the next year or two, with the unit said to attract interest from drugmakers such as EMS and Torrent Pharma, as well as private equity firms.

However, sources said last week that Advent has emerged as the leader in the race to purchase Zentiva, after a number of suitors, including Torrent Pharma, reportedly withdrew from the process due to disagreements over price.

FirstWord Reports: Providing insight, analysis and expert opinion on important Pharma trends and challenging issues <Click here>

Sanofi noted that Advent has committed to support the Zentiva management team to invest in the company's operations, production facilities and R&D pipeline. "We believe that Zentiva is a great platform…to build a new, independent, European generics leader," stated Advent managing directors Tom Allen and Cédric Chateau. The transaction is expected to close by the end of 2018.

Commenting on the deal, Jerome Schupp of Prime Partners said "the sale price is decent, but nothing that extraordinary," adding "Sanofi will probably re-invest the proceeds in looking to make pharma or biotech acquisitions. They are looking to strengthen their pipeline, which is a bit weak at the moment."

To read more Top Story articles, click here.