(Adds industry context)
By Pamela Barbaglia and Arno Schuetze
LONDON/FRANKFURT, March 8 French drug maker
Sanofi is looking to hire advisers for the sale of its
European generic drug business by the end of the month, sources
told Reuters, ahead of an auction process which is set to start
after the summer.
A handful of banks have been shortlisted to present their
final pitches for the long-awaited deal which could be worth
more than 2 billion euros ($2.1 billion), the sources said.
Bankers have been vying for a mandate for the past 18 months
since Sanofi boss Olivier Brandicourt took charge of the French
firm and decided to put the business under review.
A final decision on the advisory line up, which could see a
boutique bank working hand in hand with a larger player, is
expected in around two weeks, the sources said.
A spokesman at Sanofi declined to comment.
France's largest drug maker, which recently worked with
Lazard to finalise a $20 billion asset swap deal with German
firm Boehringer for Sanofi's Merial animal health arm, said in
January it was expecting to complete the sale of the European
generics business by the end of 2018.
The company started the legal work needed to disentangle the
European generics business from its global operations toward the
end of last year, the sources said, after announcing its plans
to sell the unit in October.
Financial advisers will need to bring potential bidders to
the negotiating table and conduct a formal auction process.
Sanofi, which recently failed to buy Swiss biotech firm
Actelion and U.S. drug maker Medivation, wants to hold on to its
global generics business including in emerging markets where it
is looking to further develop its operations.
Its exit from the European generics market, where it made
about 1 billion euros in sales in 2015, has already drawn
interest from heavyweight buyout funds keen to invest in
healthcare assets due to their high growth prospects and
resilience in the event of a downturn.
Private equity firms Advent, Cinven and Permira
are currently vying for Germany's Stada Arzneimittel,
another generic drugs firm, which has been valued at more than
3.5 billion euros.
Sources said Sanofi would offer another good chance to
invest in generic drugs for those who miss out on Stada.
Other private equity firms such as CVC Capital Partners
and PAI Partners have recently clinched deals in the
sector where they bought Italy's Doc Generici and France's
Large industry players like Teva Pharmaceutical
have already gained enough scale in the generic drugs sector and
are unlikely to make an offer for Sanofi's unit, the sources
said, pointing to Teva's $40.5 billion purchase of Allergan's
generics business which was completed last year.
($1 = 0.9471 euros)
(Additional reporting by Matthias Blamont in Paris; Editing by