French pharmaceutical giant Sanofi has entered into exclusive negotiations with US-based private equity firm Advent International to divest its European generics business Zentiva for €1.9bn.

Following the binding deal, the two companies plan to jointly work to establish a new independent operation.

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Zentiva offers a wide range of generic medicines across various therapeutic areas. The business caters to more than 40 million patients throughout 25 European countries.

Advent International European healthcare managing director and co-head Tom Allen, and French division managing director and head Cédric Chateau jointly commented: “We have long been attracted to the generics pharmaceutical sector as it enables more people to access high quality treatments by lowering their cost.

“Following a comprehensive review of strategic options for our generic unit in Europe, we have determined that transferring this business to Advent is the best option to ensure its long-term success.”

“We believe that Zentiva is a great platform, full of talented people, who we can invest behind to build a new, independent, European generics leader.”

Advent will support the management at Zentiva through investment in operations, production facilities, and the research and development pipeline.

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Sanofi CEO Olivier Brandicourt said: “Zentiva is a robust business with a highly talented workforce and we believe it has demonstrated its potential for growth.

“Following a comprehensive review of strategic options for our generic unit in Europe, we have determined that transferring this business to Advent is the best option to ensure its long-term success.”

Subject to the finalisation of definitive agreements and regulatory approvals, the acquisition is expected to be completed by the end of this year.