By Sarah Morland, Ludwig Burger

(Reuters] -Sanofi intends to list EUROAPI as its drug ingredient subsidiary on May 6th, stating that it is ready to expand and enhance its profitability.

The listing of the Euronext Paris stock exchange has been approved by the French regulator. It is expected to happen shortly after a May 3rd meeting. Sanofi The French drug giant, French Pharmaceutics Corporation (NASDAQ:), announced Friday that shareholders voted on the listing.

Sanofi shareholders receive one EUROAPI Share for every 23 shares they hold in the parent company.

According to the company, it plans to retain a 30% share of the business following the listing. France will purchase a 12% interest through EPIC Bpifrance public-sector bank for as much as 150 million euros ($166 millions).

The EU is concerned about the dependence of critical pharma ingredients imports in Europe and has floated the plan to the group. This comes amid the outbreak of coronavirus, Russia’s invasion on Ukraine, and the recent flotation plan.

Through the participation of BPIFrance, you can see also the interests in the areas of regional sovereignty development. It’s not just the interest of France. “It is the entire interest of Europe,” Jean-Baptiste de Chatillon, chief of Sanofi finance, said during an analyst call.

L’Oreal was Sanofi’s biggest shareholder, holding a greater than 9% of the company’s shares. Sanofi also added that they agreed to a 1-year lock-up after listing.

EUROAPI manufactures active pharmaceutical components (APIs), which are used in the production of medicines. It has six manufacturing sites located in France, Germany Germany, Britain France, Hungary and France.

Sanofi last year represented half of EUROAPI’s revenues. In January, the company stated that it expected the business to be the second-biggest API provider in the world with approximately 1 billion euros in annual revenue.

Sanofi CFO de Chatillon claimed that EUROAPI’s core profit margin was at least 14% in this year’s fiscal, far below 21% for Siegfried AG, Switzerland. This was why Sanofi is not considered the best-owned company.

De Chatillon stated, “When you look at the peer performance, there’s a margin of improvement that we really believe will be delivered.”

Karl Rotthier was the company’s new CEO. He stated that EUROAPI as an independent organization would be able to win more customers from Sanofi and expand its services in advisory and high-margin drugs development and consultancy, while also cutting costs.

EUROAPI shareholders will receive 58% of EUROAPI share capital through a dividend-in-kind, as well as a 3.33 euro per share cash payment.

($1 = 0.9035 euros)