Sanofi CEO says buying L'Oreal's stake could be 'very accretive'
By Ben Hirschler
DAVOS, Switzerland (Reuters) - Buying back L'Oreal's (OREP.PA: Quote) 9 percent stake in Sanofi (SASY.PA: Quote) could be "very accretive" for the French drugmaker, although the idea remains speculative as the $12 billion holding has yet to be put up for sale, Sanofi's CEO said.
Investor attention has focused increasingly on a potential realignment of shareholdings that may see Sanofi making a debt-funded repurchase of L'Oreal's stake in a move analysts believe should boost the pharmaceutical group's earnings.
Such a deal could provide Sanofi with a useful lift as it seeks to return to growth after a difficult 2013 that featured problems in Brazil and several product setbacks.
"If you get the chance you are certainly going to look seriously at it - but it is an 'if, if, if' situation," Sanofi Chief Executive Chris Viehbacher told Reuters on Friday on the sidelines of the World Economic Forum in Davos, Switzerland.
"It could very well be, when you get there, that it could be a very accretive thing to do."
L'Oreal's CEO Jean-Paul Agon said last year the cosmetics company could buy back the 29.5 percent stake that Swiss food group Nestle NESN.VX holds in it, if L'Oreal in turn sells the 9-billion-euro ($12 billion) stake it owns in Sanofi.
Agon reaffirmed last week that his group had the firepower to enable it to buy Nestle's stake. Restrictions on Nestle selling down its L'Oreal holding end in April.
Viehbacher, who will unveil full-year results next month, said his group had strong growth drivers in vaccines, rare diseases, animal health and consumer health products, adding that a lot of the focus for 2014 would also be on the promising drug pipeline. Continued...