Sanofi sells Gujarat site to Advent

MUMBAI: Sanofi India sold its manufacturing facility at Ankleshwar in Gujarat to Advent International for Rs 262 crore. The board on September 10 approved the slump sale and transfer of its facility to Zentiva India, part of Advent, subject to customary working capital adjustments, according to a company statement.
In 2018, as part of a global transaction, Zentiva, which was Sanofi’s European generics business, was sold to Advent International.Following this, Zentiva continued to source products from Sanofi for its generics business, pursuant to a five-year supply agreement that expires in 2023.
The Ankleshwar site is Sanofi India’s oldest manufacturing facility where brands like Combiflam, Allegra and Amaryl are made, and over 6 billion tablets are produced annually. The production of these brands will now be moved to the company’s Goa facility and external manufacturing sites as well. Sanofi India’s scrip declined by over 4% to Rs 5,988 on the BSE on Wednesday, reacting to the company’s potential revenue loss.
After this transition, estimated average annual revenue loss to the company over the next four years (balance of five-year supply agreement) is about Rs 470 crore. The company plans to mitigate this over a period of time through building its brands in key therapeutic areas and reaching a larger number of patients.
“Sanofi’s long-term strategy is to focus on manufacturing Sanofi-branded products. Given that the two companies share similar values and commitment towards serving patients and their employees, the board of directors of Sanofi India approved this transaction in the long-term interest of all stakeholders.” said Sanofi India MD Rajaram Narayanan.