The French government warned a US-based private equity firm that was buying the consumer healthcare division of Sanofi, that it would face penalties exceeding EUR100m for not keeping production and jobs in France.
Sanofi is separating Opella . Opella produces the paracetamol Doliprane brand, the laxative Dulcolax, and other over-the counter medicines and vitamins. The news that Clayton, Dubilier & Rice, based in New York, was holding talks on 11th October sparked fears of French jobs being lost and the company losing control.
Sanofi announced on Monday that it has entered into exclusive negotiations with CD&R to sell a 50% stake of the consumer business valued at €16bn. Bpifrance will take a 2% share and sit on Opella’s board.
Antoine Armand said the trilateral agreement reached over the weekend between Sanofi, CD&R and Opella would require its new American owners to maintain key factories, management, research and 1,700 employees in France. CD&R has pledged to invest €70m over the next 5 years in France.
Armand, who presented the agreement with Marc Ferracci, the minister of industry, said: “To ensure these guarantees are respected, there will be] firm sanctions, immediate, and far-reaching.”
Opella will have to pay €40m in penalties if they stop production at their factories in Lisieux, France and Compiegne, France. These factories produce Doliprane, as well as drugs for allergy and digestive problems.
Since the deal was announced, workers at both factories are on strike in protest. Opella has agreed to pay an €100,000 penalty for each layoff that is economic in nature.
Opella is also required to purchase the active ingredient used in the production of paracetamol under a long-term agreement with Seqens, a French supplier. Opella must pay a penalty of €100m if they break this promise.
Sanofi, a Paris-listed company, said that it would retain an important stake in the division and would instead focus on developing innovative medicines.
Doliprane, the most popular drug in France, became a hot political topic during the pandemic of coronavirus. Shortages prompted Emmanuel Macron’s government to invest in local production.
Sanofi believes that the spin-off follows in the footsteps of other similar deals by American companies Johnson & Johnson, Pfizer, and Britain’s GSK. GSK has sold off its consumer business so as to focus on research and development of new drugs.
Paul Hudson, the British-born CEO of Sanofi, said that the company chose Bpifrance as a partner in Opella’s growth journey.
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