As Sanofi presses ahead with the sale of its European generics business, a private equity firm has bowed out, saying the deal is too expensive, the Financial Times reported.
Nordic Capital has bowed out of the bidding due to "very high" expectations over price, the Financial Times reported. The firm had intended to team with another private equity outfit, Blackstone, to bid on a unit that could fetch €2 billion ($2.47 billion).
Sanofi has said it should be able to sign a deal by the third quarter, and FT has previously reported the company has narrowed its list of buyers to Brazil's EMS and India's Torrent Pharma, plus a handful of private equity firms. The companies are completing due diligence before new bids are due next month, according to FT's sources.
Sanofi's European generics business operates in 50 countries and sells drugs in disease areas including cardiovascular, central nervous system, gastrointestinal and metabolic disorders and more. The unit generated €760 million last year, a 4.9% decrease from 2016, Sanofi reported.
The French drug giant started talking about a sale for its European generics business way back in 2015.
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The deal talks come as Sanofi continues to transform under CEO Olivier Brandicourt, who came on board in 2015 and has worked to zero in on five global business units. Between sell-offs and cost-cutting, the company aims save €1.5 billion in annual costs.
Already, Brandicourt has offloaded Sanofi's animal health unit Merial in a 2016 asset swap with Boehringer Ingelheim, in return for BI's consumer health business.
But Brandicourt hasn't just slimmed down. This year, Sanofi shelled out $4.8 billion for nanobody biotech Ablynx and $11.6 billon for hemophilia-focused Bioverativ—buys the CEO recently said "dramatically reshape our portfolio in specialty care, giving us a leading position in hemophilia and other rare blood disorders, and significantly strengthens our R&D."
The company tried to buy Actelion and Medivation last year, but lost out in those pursuits to Johnson & Johnson and Pfizer, respectively.