The coverage of the announced negotiation by Sanofi to divest its European generics business triggered this cranky post.
I don’t quite understand why so many journalists/analysts negatively criticize management when a divestment is taking place.
I am willing to assume that Sanofi has highly skilled, intelligent management, analysts, consultants, etc., and they have concluded that a divestment is in the best interest of the company and its shareholders.
Similarly, I am willing to assume that Advent also has highly skilled management, analysts, consultants, etc., and they have concluded that this acquisition is in the best interest of their investors and shareholders.
Some cost cutting at Zentiva will likely occur post acquisition, but this is not the kind of business where a PE shop will sell off the assets to generate ROI. What would they sell? Lactose inventory?
A free market assumes rational buyers and rational sellers. Rational buyers and sellers may make erroneous assumptions and/or post-acquisition management mistakes, but we’ll only know that after the fact via some armchair quarterbacking.
At the time the transaction is closed, we should assume the deal is good for both parties, and not criticize management for “offloading” an asset.
Besides, we don’t know all the details.
Who are we to say that the deal is “good” or “bad” for either party?
Let’s see what happens before coming to any conclusions.