In the French government issued a stern warning to Clayton, Dubilier & Rice (CD&R), an American private equity firm, concerning its acquisition of a significant stake in a subsidiary of pharmaceutical giant Sanofi. As part of the takeover agreement, CD&R would gain control over Opella, Sanofi’s subsidiary responsible for manufacturing over-the-counter drugs such as paracetamol, a staple in French households under the brand Doliprane.
The French government made it clear that CD&R would face severe financial penalties if the firm attempted to relocate jobs or drug production outside of France, underscoring the country’s determination to safeguard its strategic pharmaceutical sector amidst global economic pressures and post-pandemic supply chain concerns.
On Monday, Sanofi announced that it had entered into exclusive talks with CD&R, marking the next phase in a deal that would see the private equity firm acquire 50 percent of Opella’s shares for approximately €16 billion. The decision is part of Sanofi’s broader strategy to divest from non-core business areas and focus more on vaccines and innovative drug development.
Opella, currently under Sanofi’s full control, is responsible for manufacturing widely used over-the-counter drugs like paracetamol, antihistamines, and medications for digestion. These everyday essentials are a crucial part of Sanofi’s consumer healthcare portfolio but not directly aligned with its long-term vision to advance medical innovations and vaccine development.
However, as soon as discussions of the deal surfaced, it sparked intense political debate in France, with opposition coming from multiple political factions concerned about the potential threat to jobs and France’s sovereignty over critical pharmaceutical production.
The criticism of the deal wasn’t confined to one side of the political aisle. Both left- and right-wing political figures voiced concerns about the possible ramifications for France’s domestic production of essential medicines like paracetamol. These fears align with Europe’s broader post-pandemic effort to secure supply chains for vital goods, such as medicines, which were disrupted during the COVID-19 crisis.
During the pandemic, Europe, including France, faced significant shortages of medical supplies, which were exacerbated by its reliance on foreign suppliers for raw ingredients and essential drugs. This spurred policymakers to reassert the importance of national control over the production and supply of medicines. The idea of offshoring manufacturing in a critical sector such as pharmaceuticals has since become a political flashpoint.
Speaking to these concerns, Industry Minister Marc Ferracci emphasized the government’s position, stating that the takeover would be closely monitored to prevent any attempts to relocate jobs or shift production outside of France. The government remains firmly committed to ensuring that the acquisition does not undermine France’s long-term strategic interests in the pharmaceutical sector.
To address these concerns, the French government moved swiftly to impose strict conditions on the takeover. On Sunday night, after extensive negotiations, a trilateral agreement was signed between Sanofi, CD&R, and the French government. This deal stipulates that any attempt by CD&R to relocate jobs or production facilities from France will result in immediate and severe financial penalties.
Economy Minister Antoine Armand, alongside Industry Minister Ferracci, unveiled the details of the agreement on Monday. Armand spoke emphatically about the measures, stating: “To ensure that these guarantees are respected with the utmost rigor and firmness, [there will be] firm, immediate and far-reaching sanctions.”
Among the sanctions, one key provision requires Opella to maintain its production facilities in France. If Opella halts production at two critical factories that manufacture popular over-the-counter drugs like paracetamol and allergy medications, the company will be fined €40 million. These factories are essential to France’s healthcare infrastructure, as they produce Doliprane, a highly consumed drug in the country.
Moreover, the deal goes further to ensure that Opella cannot cut jobs without facing financial repercussions. If CD&R initiates layoffs for economic reasons, Opella will incur a penalty of €100,000 for every worker laid off.
Perhaps the most significant provision in the deal is related to Opella’s obligation to source raw materials from domestic suppliers. One of the government’s key concerns has been the reliance on foreign suppliers, especially for active pharmaceutical ingredients (APIs), which are critical in drug manufacturing. The pandemic revealed the vulnerabilities of global supply chains, leading to shortages that affected the availability of medicines across Europe.
As part of the agreement, Opella is required to purchase the active ingredient for its paracetamol production from a future French factory, to be operated by Seqens, a local chemical group. This factory, slated to open in 2026, is a key part of France’s plan to bolster domestic production capabilities for essential pharmaceutical ingredients. If Opella fails to honor this commitment, it will face a staggering €100 million penalty.
These measures reflect France’s broader goal of reshoring pharmaceutical production to reduce its dependence on foreign supply chains, particularly for vital medicines. The sanctions aim not only to protect French workers and consumers but also to promote industrial sovereignty, a priority for many European nations in the post-pandemic landscape.
To further ensure that France’s strategic interests are protected, the public investment bank Bpifrance will acquire a small stake in Opella, up to €150 million, giving the government greater visibility into the company’s operations and strategic decisions. While the stake represents only a minor share of Opella’s overall ownership, it grants the government a degree of influence in safeguarding French industrial interests.
Bpifrance’s involvement is part of a broader strategy to support French businesses and industries while maintaining oversight of critical sectors. The Economy Ministry expressed confidence that the deal’s strict conditions would align with France’s industrial goals of securing supply chains and promoting pharmaceutical sovereignty.
Meanwhile, workers at Opella’s production facilities have expressed deep concerns about the takeover, fearing that the American private equity firm could prioritize cost-cutting measures that might lead to layoffs or a shift in production overseas. These concerns led to strikes at two of the company’s main factories, which produce key over-the-counter medications.
The strikes, which began as soon as rumors of the American takeover surfaced, have added pressure on CD&R and Sanofi to ensure that the deal preserves French jobs. Workers are demanding concrete assurances that their employment will be protected under the new ownership structure.
The €100,000 penalty per layoff included in the agreement is seen as a key measure to address these concerns. Still, union leaders have indicated that they will continue to closely monitor the situation, and further strikes could be on the horizon if workers feel that their interests are not being adequately protected.
In response to the government’s stringent conditions and the growing unrest among workers, CD&R has committed to investing €70 million in Opella’s French operations over the next five years. This investment is aimed at modernizing facilities, improving production capabilities, and enhancing research and development activities within the country.
Furthermore, CD&R has promised to keep Opella’s headquarters and research and development (R&D) centers in France, a move that aligns with the government’s goal of retaining high-value jobs and expertise within the country. This commitment is seen as crucial for maintaining France’s position as a leader in the pharmaceutical sector, particularly in research and innovation.
