French drugmaker Sanofi looks to spin off its consumer business in India

Mumbai: French drugmaker Sanofi has initiated a process to turn its consumer healthcare business in India into a listed entity through a demerger, said people with knowledge of the matter.

The unit’s products include leading anti-allergy brands such as Allegra and Avil, pain management drug Combiflam and Vitamin D brand Depura. The business posted revenue of Rs 1,000-1,250 crore in CY22. About 70% of Sanofi’s India revenue is contributed by its top seven brands.

The leading vaccine maker is working with Bank of America on the demerger process, said the people cited above. About 60% of Sanofi India is owned by Sanofi and wholly owned subsidiary Hoechst Gmbh. The rest is held by foreign and domestic institutional investors along with retail investors.

The plan is to list the consumer business separately with the shareholding mirroring that pattern.

"As a matter of principle and policy, we do not comment on any media speculation or on market rumours," said a Sanofi India spokesperson. "In the ordinary course of business and subject to compliance with applicable laws, we regularly assess how best to serve our patients and customers and evaluate different opportunities in India. Sanofi India Limited complies with all regulatory disclosure requirements."

Global ReOrganisation
Sanofi global chief executive Paul Hudson, who joined from Novartis AG, initiated a five-year turnaround plan in 2019. He's been under pressure from investors about the strength of the drug pipeline and has been pressing ahead with changes at the group, including exiting categories such as cardiac disease and diabetes, while investing heavily in cancer treatments and immunology. This included turning the consumer group into a separate business although it remained wedded to the parent.

The move coincided with a trend at pharmaceutical giants such as Johnson & Johnson and GlaxoSmithKline Plc simplifying their diversified structures.

Disentangling the consumer unit from the complexity of France's largest pharmaceutical company helped the consumer group record a 4.6% year-on-year rise in 2021 sales, CEO Hudson said.