Aurobindo, Zydus Cadila, Torrent Pharma show interest to buy Sanofi 2 billion dollar European generics business

MUMBAI: Aurobindo, Zydus Cadila, Torrent Pharma and Intas have shown their interest to buy the European generics business of pharma giant Sanofi.

Olivier Brandicourt CEO of Sanofi, outlined to investors plans to divest the European generics business by the end of this year as part of a strategic roadmap at the JPMorgan Healthcare conference in San Francisco.

In March 2017, Medical dialogues had reported that Sanofi was planning the sale of its European generic drug business and was looking to hire advisers for the same.

Read also: Sanofi gears up for European generic drugs unit sale: sources

In October 2017, the company began the process to sell its generic drug business in Europe, and since then at least six funds have expressed interest to investment banks mandated by the group.

Now, Indian pharma giants have shown their interest towards the divestment, as per recent media reports.

Read also: At least six funds interested in Sanofi European generic drugs unit -Le Figaro

The portfolio of acute, chronic and oncology products could fetch a valuation of $1.5-2 billion, making it among the largest outbound transactions pursued by an Indian drug company reports ET.

Pitted against them are a top Chinese drugmaker and an array of global PE players, some of whom may tie up with strategic players.

Zydus Cadila is backed by Apax Partners and Europe’s leading private equity buyout shop while Intas is backed by Temasek and Chrys Capital. JPMorgan, Morgan Stanley and Rothschild have been mandated to run a formal sale process.

Confirming the plans to ET, Sanofi spokesperson said in an emailed statement, “We are currently in the process of carving out the EU generics business which is a complex process. Standalone accounting and infrastructure will need to be established before we can separate it cleanly from the rest of Sanofi and you will appreciate this will take us some time.”

According to an official, work has begun to explore financing and the leverage for some Indian players is high, so accordingly the company will have to work out their strategy. He added, “Intas, for example, already has a strong base in the UK and it wants to expand in the region. This is a scaled operation.”

Et reports that Intas is currently the sole contender left in fray for Mallinckrodt’s generics drug business in the US, a potential $1.5-billion transaction that would give the drugmaker access to the attractive therapeutic segment of controlled substances, or opioids, that have steep entry barriers and high margins. Even then, Intas is keen to pursue the Sanofi opportunity reports the daily.

Last year, Torrent Pharma acquired Unichem Labs’ India business for Rs 3,600 crore to enter the top ranks of the Indian drug market whereas Zydus Cadila focused on small deals to exaggerate its India operations while occasionally bagging proprietary products such as the $171-million (Rs 1,164 crore) deal with US-based Sentynl Therapeutics announced around the same time last year.

Apax Partners, which already owns several generics operations in Europe, will help boost the financial strength of a Cadila bid.