This is a case that has all the ingredients of a political bomb. A legendary brand, a tricolor nugget that could fall into foreign hands and the fear of seeing our health sovereignty further damaged. In the early hours of Covid, the French were amazed to discover that there was almost no longer a single surgical mask factory in France and that almost all of the active ingredients used in the composition of our medicines were manufactured manually. other side of the planet, mainly in India and China.
What would happen if one day Doliprane was no longer manufactured in France? While the French pharmaceutical giant Sanofi announced just a year ago its wish to get rid of its consumer subsidiary, Opella, the future of the little yellow box should be sealed in the coming days. No doubt before the publication at the end of October of Sanofi’s financial results for the third quarter. A sale with an economically, socially and politically explosive outcome as Emmanuel Macron made paracetamol the spearhead of his industrial reconquest in the health sector.
The company is valued at around 15 billion euros and the sale of more than 50% of the capital could make it the largest financial transaction in recent years. This “deal”, which occupies an armada of advisors, investment bankers and specialist lawyers day and night, sits at the top of the pile of burning files of the brand new Minister of Industry, Marc Ferracci.
Behind the political-financial affair, it is also the end of a very French story whose writing began more than 20 years ago. In April 2004, Sanofi swallowed whole its French competitor Aventis, born a few years earlier from the merger between Hoechst AG and Rhône-Poulenc. In the bride’s basket, the Doliprane. At the time, this 55 billion euro marriage gave birth to the world’s third largest pharmaceutical player, present in over-the-counter medicines, vaccines and anti-cancer drugs. The promise of a bright future awaits the flagship of French pharma, which dreams of becoming world number one in the sector. Except that the story didn’t go entirely as planned. Expensive purchases – including the American start-up Genzyme in 2011 for nearly 24 billion euros -, questionable scientific choices, aging of its portfolio of the most profitable drugs whose patents fell into the public domain one after the other…
Slow downgrading
The 2010 decade is not that of conquest but of slow downgrading. Sanofi sees itself in competition and dethroned by Johnson & Johnson, Novartis and Pfizer. When Paul Hudson, the former boss of Novartis, took the helm of the French liner in 2019, the group’s stock price was at rock bottom. For the Briton, it’s time for a big clean-up. Certainly, the consumer health subsidiary, which brings together medicine cabinet standards such as Doliprane, Lysopaïne, Dulcolax, Maalox and Novanuit, still represents 12% of the company’s overall turnover. It is also very profitable – the margin would reach almost 27% – but it is no longer a priority. Especially since all the other Big Pharma have also shed their consumer segment like GSK or Johnson & Johnson.
“The core of Sanofi’s activity is first and foremost to invest in research to find new vaccines or drugs and meet the unmet needs of patients,” explains one of the company’s managers today. It must be said that internally, the fiasco of the anti-Covid vaccine and the failure of the shift to RNA vaccines – a technology developed by one of the start-ups purchased years earlier by Sanofi but abandoned – left their mark. “If we want to accelerate, we must increase the R&D budget by around 700 million euros per year, which has already increased from 5 billion in 2020 to 7 billion last year,” continues this manager. . For Sanofi, the divorce from Opella is formalized in October 2023.
An attractive bride
Then begins the search for a potential fiancé. The bride has beautiful assets. In the open access medicines and food supplements segment, Opella is the third largest player in the world, with nearly 5.2 billion euros in turnover last year for an operating profit of 1.4 billion. Performance achieved 90% outside France, the United States being the leading market. In France, more than three quarters of turnover comes from Doliprane, which is only sold on the French market.
Opella may be attractive, but as the months go by, a good number of potential candidates throw in the towel. It must be said that Bercy and the Elysée joined in, increasing the pressure on the French group which initially only wanted to keep 20 to 30% of the capital. Sanofi would ultimately keep between 45 and 49%. Enough to put off certain suitors, of whom there are only two today. Not industrialists but investment funds with deep pockets.
Bercy go
The richest, the American Clayton Dubilier & Rice (CD&R), one of the largest funds across the Atlantic, is not unknown in France. In the past, it has already absorbed Rexel, Spie and Socotec. And saved Conforama from bankruptcy four years ago after taking over But. His Achilles heel? His nationality. For the purchase of more than half of Opella to materialize, the Minister of the Economy and the unit responsible for controlling foreign investments at Bercy must give their approval. A politically explosive sesame because a good part of the left and the National Rally would take advantage of it to accuse the new government of selling off the family jewels. The other candidate, the French fund PAI Partners, is trying to play the tricolor card. But to win the bet, the “little” Frenchman had to join forces with foreign investors: Adia, the sovereign wealth fund of Abu Dhabi, GIC, that of Singapore, and the Canadian pension fund British Columbia Investment. The downside of this hitch? Multiple operational control, even if the French from PAI Partners promise to have their hands free to manage Opella and its 11,000 employees.
Worried employees. In Lisieux, the factory which produces almost all of the Doliprane sold in France is said to be operating slowly. “For several months, the machines have been running at low speed, with production around 700,000 boxes per day, compared to an average of 1.2 million or even 1.5 million during peaks. I have been working here for 23 years and I “I’ve never seen that,” accuses Yohan Nicolas, CGT delegate of the company. False, we retort to Opella management: “Volumes have normalized after two intense years of production. The Lisieux site is operating at maximum capacity, as planned in preparation for the winter season”.
Pending the final choice of Sanofi, the State has already taken the lead. Bpifrance, the public investment bank, is ready to support the future buyer when the latter is chosen, Nicolas Dufourcq, its general director, has already announced. A way to silence the grumpy people.
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