France warns US buyer of Sanofi division of penalties for shifting production abroad

A picture


The French government has warned a US private equity firm buying the consumer healthcare arm of the drugmaker Sanofi that it faces penalties of more than €100m if it does not keep production and jobs in France.Sanofi is splitting off Opella, which makes the paracetamol brand Doliprane, the laxative Dulcolax and other over-the-counter medicines and vitamins.However, news of talks with the New York-based Clayton, Dubilier & Rice on 11 October prompted fears about French jobs and the loss of control to a foreign company.On Monday, Sanofi announced that it had entered exclusive negotiations with CD&R for the sale of a 50% stake in the consumer business, valuing it at €16bn.However, France’s state-owned investment bank, Bpifrance, will also take a 2% stake and a seat on Opella’s board.

France’s economy minister, Antoine Armand, said that under a trilateral agreement thrashed out with Sanofi and CD&R over the weekend, Opella’s new American owners will have to keep key factories, research, management and its 1,700 workforce in France.CD&R pledged to invest €70m in France over the next five years.“To ensure that these guarantees are respected with the utmost rigour and firmness, [there will be] firm, immediate and far-reaching sanctions,” Armand said as he presented the deal alongside the industry minister, Marc Ferracci.Opella would have to pay a €40m penalty if it were to stop production in its factories in Lisieux and Compiègne in northern France, which produce popular medicines such as Doliprane and drugs to treat allergy and digestion problems, over the next five years, and there is the potential to extend this requirement.Workers at both factories have been on strike to protest against the deal since the news broke.

Under the deal, Opella will have to pay a €100,000 fine for every economic-related layoff.The agreement also requires Opella to source the active ingredient for the production of paracetamol from the French supplier Seqens under a long-term contract.Opella will have to pay €100m penalty if it breaks that promise.Paris-listed Sanofi said it would retain a significant stake in the division but would focus on producing innovative medicines and vaccines.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionDoliprane is the bestselling drug in France but production in the country became a political hot topic during the coronavirus pandemic, when shortages prompted the government under Emmanuel Macron to invest in production within the country.

From Sanofi’s point of view, the deal follows the logic of similar spin-offs by the American drug companies Johnson & Johnson and Pfizer and by Britain’s GSK, which has sold its consumer businesses to concentrate on researching and developing new drugs.Paul Hudson, Sanofi’s British-born chief executive, said: “We chose the group with the best capabilities and people that would help us enable the long term success of the business.” He said Sanofi also welcomed Bpifrance “as a supporter of Opella’s development journey”.
technologySee all
A picture

As Silicon Valley eyes US election, beware Elon Musk and the tech bros with political nous | John Naughton

Way back in the 1960s “the personal is political” was a powerful slogan capturing the reality of power dynamics within marriages. Today, an equally meaningful slogan might be that “the technological is political”, to reflect the way that a small number of global corporations have acquired political clout within liberal democracies. If anyone doubted that, then the recent appearance of Elon Musk alongside Donald Trump at a rally in Pennsylvania provided useful confirmation of how technology has moved centre-stage in American politics. Musk may be a manchild with a bad tweeting habit, but he also owns the company that is providing internet connectivity to Ukrainian troops on the battlefield; and his rocket has been chosen by Nasa to be the vehicle to land the next Americans on the moon.Sign up to ObservedAnalysis and opinion on the week's news and culture brought to you by the best Observer writers after newsletter promotionThere was a time when the tech industry wasn’t much interested in politics

A picture

Quit if you don’t like our office-working policy, Amazon executive suggests

A senior Amazon executive has suggested that staff who do not like the company’s new five-days-a-week office-working policy should quit.The head of the tech company’s cloud computing business told an internal meeting that if employees did not support the change they could look for a job elsewhere, according to a transcript reviewed by Reuters.Matt Garman, the chief executive of the Amazon Web Services (AWS) unit, said nine out of 10 workers he had spoken to supported the policy, which is effective for all office-based staff from 2 January, barring those with exceptional circumstances.He indicated that anyone unhappy with the retreat from home-working should leave. “If there are people who just don’t work well in that environment and don’t want to, that’s OK, there are other companies around,” said Garman, in the comments reported by Reuters

A picture

AI-generated child sexual abuse imagery reaching ‘tipping point’, says watchdog

Child sexual abuse imagery generated by artificial intelligence tools is becoming more prevalent on the open web and reaching a “tipping point”, according to a safety watchdog.The Internet Watch Foundation said the amount of AI-made illegal content it had seen online over the past six months had already exceeded the total for the previous year.The organisation, which runs a UK hotline but also has a global remit, said almost all the content was found on publicly available areas of the internet and not on the dark web, which must be accessed by specialised browsers.The IWF’s interim chief executive, Derek Ray-Hill, said the level of sophistication in the images indicated that the AI tools used had been trained on images and videos of real victims. “Recent months show that this problem is not going away and is in fact getting worse,” he said

A picture

AI mediation tool may help reduce culture war rifts, say researchers

Artificial intelligence could help reduce some of the most contentious culture war divisions through a mediation process, researchers claim.Experts say a system that can create group statements that reflect majority and minority views is able to help people find common ground.Prof Chris Summerfield, a co-author of the research from the University of Oxford, who worked at Google DeepMind at the time the study was conducted, said the AI tool could have multiple purposes.“What I would like to see it used for is to give political leaders in the UK a better sense of what people in the UK really think,” he said, noting surveys gave only limited insights, while forums known as citizens’ assemblies were often costly, logistically challenging and restricted in size.Writing in the journal Science, Summerfield and colleagues from Google DeepMind report how they built the “Habermas Machine” – an AI system named after the German philosopher Jürgen Habermas

A picture

Watchdog opens investigation into anti-immigrant posts on Facebook

Mark Zuckerberg’s Meta must answer “serious questions” about its handling of anti-immigration material, according to the company’s content watchdog, as it opened an investigation into two Facebook posts.The Oversight Board is investigating Meta’s decision to keep the posts online after acknowledging that it receives a significant number of complaints from users over content that shares anti-immigrant views.Helle Thorning-Schmidt, co-chair of the board and a former Danish prime minister, said it was “critical” to get the balance right between free speech and protection of vulnerable groups.“The high number of appeals we get on immigration-related content from across the EU tells us there are serious questions to ask about how the company handles issues related to this, including the use of coded speech,” she said in a statement.The first case being investigated by the board is focused on a meme posted by the administrator of a Facebook page that describes itself as the official account of Poland’s far-right coalition party Confederation

A picture

Meta fires staff for ‘using free meal vouchers to buy household goods’

Meta, the owner of Facebook and Instagram, has reportedly fired about 24 staff at its Los Angeles offices for using their $25 (£19) meal credits to buy items such as toothpaste, laundry detergent and wine glasses.The tech firm, which is worth £1.2tn and also owns the messaging platform WhatsApp, is said to have dismissed workers last week after an investigation discovered staff had been abusing the system, including sending food home when they were not in the office.That included one unnamed worker on a $400,000 salary, who said they had used their meal credits to buy household goods and groceries such as toothpaste and tea.On the anonymous messaging platform Blind, they wrote: “On days where I would not be eating at the office, like if my husband was cooking or if I was grabbing dinner with friends, I figured I ought not to waste the dinner credit