Sanofi to demerge consumer healthcare business

As per newspaper reports, Sanofi India is working on spinning off it’s consumer healthcare business in India in a separate listed entity.

• The subject 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 (against a total revenues of Rs 2,770 cr)
• The plan entails the separate listed entity to have the similar shareholding pattern as current Sanofi India’s
  • In Sanofi India – 60.4% is owned by the promoters, 27.9% by institutions and balance 11.7% by the public

Why the demerger?

Sanofi globally has been facing some headwinds and is undergoing a 5 yr turnaround plan initiated in 2019.

The speculated demerger (like any other demerger) is targeted towards –

• greater focus in the main company towards core business of pharmaceuticals.
• value unlocking through the demerged business. A consumer business approach may also allow direct marketing of the brands to the consumer; though that may invite greater regulator scrutiny.