Last week, Sanofi SA (NASDAQ:SNY) said it is negotiating with Clayton Dubilier & Rice (CD&R) to potentially sell a 50% controlling stake in Opella, its consumer healthcare business.

The deal could be valued at about 15 billion euros ($16.4 billion), making it one of the largest European transactions this year. Sanofi is likely to retain a minority stake in the Opella business.

France’s government has hinted at the possibility of blocking the sale of Sanofi’s consumer pharmaceuticals division to CD&R, citing concerns over employment and national healthcare interests.

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Citing French industry minister Marc Ferracci, the Financial Times highlighted that the deal could be halted if specific government requirements are unmet.

Ferracci emphasized, “Legally, we can oppose it,” referring to the provisions in France’s regulatory code.

The French government’s requirements, expressed earlier in the sale process, have taken on a heightened political tone since Sanofi announced CD&R’s successful bid over a consortium led by French private equity group PAI.

The proposed sale has sparked strong opposition from various political factions, with critics arguing that it undermines France’s healthcare sovereignty.

With shortages of essential medicines such as insulin and vaccines becoming more common, concerns over potential impacts on supply chains are growing.

While CD&R has emerged as the frontrunner, PAI and its partners, including Singapore’s GIC and the Abu Dhabi Investment Authority, have argued that their French roots could better align with the country’s interests.

However, PAI’s lower financial capacity compared to CD&R, which raised a record 26 billion euros last year, has put it at a disadvantage in the bidding process.

The deal’s political and social implications, coupled with Doliprane’s significance in French households, have made this a particularly sensitive issue for the French government.

According to FT, Finance Minister Antoine Armand assured that Doliprane, a Sanofi-produced paracetamol, would continue to be manufactured in France to calm concerns about the future of local production.

Price Action: SNY stock is down 0.68% at $54.55 at the last check Tuesday.

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