Sanofi is now in “exclusive negotiations” with U.S. private equity firm Clayton, Dubilier & Rice (CD&R) to sell a 50% controlling stake in its consumer health business Opella.

With the French government saying that it has received assurances from New York City-based CD&R that it will keep Opella’s manufacturing facilities intact in France and that the supply of medicines to the country will not be hindered, one potential roadblock to the sale appears to have been cleared.

The proposed deal values Opella at 16 billion euros, Sanofi said, noting that CD&R's offer to buy the 50% share is "binding and fully financed."

Helping facilitate the spinoff is French public sector investment bank Bpifrance, which will buy up a 2% stake in Opella and take over a seat on its board under the current plan.

With the proposed transaction, which could close in the second quarter of next year "at the earliest," Sanofi will double down on its innovative medicines and vaccines. In doing so, the French drugmaker joins other biopharma giants that have made similar moves, including Johnson & Johnson, Pfizer and GSK.   

In making this move, “Sanofi can focus even more in bringing innovative solutions to patients suffering from debilitating or life-threatening diseases or viruses such as RSV, COPD, or multiple sclerosis,” Paul Hudson, the CEO of Sanofi, said in a release.

Analysts from ODDO BHF added their endorsement of the decision.

“Exiting, even partially, from its consumer franchise will allow Sanofi to reallocate its capital to research and business development,” ODDO wrote. “However, we believe that Sanofi's first priority will be to use part of its capital to offset the mechanical loss of this business through a share buyback.”

Hudson first floated the idea of divesting its consumer health unit in October of last year. Last month, Bloomberg reported that CD&R and another private equity stalwart, PAI Partners, had made separate bids for Opella. Earlier this month, Reuters reported that CD&R had made an offer to buy up 50% of the consumer health business. Then, late last week, that Sanofi said it was surprised that PAI had sweetened its offer by 200 million euros ($217 million), which came after a company-established deadline.

In response to the reports of a sale brewing, French unions urged Sanofi employees to protest the deal with a strike on Thursday of last week before the company promised that Opella would remain anchored in France.

Opella is a leading supplier of over-the-counter medicines, vitamins, minerals and supplements. Some of its most popular products include the antihistamine Allegra, non-opioid pain reliever Doliprane, stomach cramp reliever Buscopan, Selsun Blue shampoo and pain treatments Icy Hot and Gold Bond.

Opella, which counts 11,000 employees in 100 countries, generated sales of 5.2 billion euros ($5.6 billion) in 2023, accounting for 11% of Sanofi’s revenue. Opella operates 13 manufacturing sites and four research and innovation centers.