Chattanooga, Tenn.-based drug company, Chattem, was acquired by the French drug company, Sanofi-Aventis Monday for $1.9 billion. The purchase will move the popular prescription antihistamine Allegra to an over-the-counter medicine.
Allegra is a Sanofi product which claims to relieve allergy symptoms such as sneezing, runny nose and watery eyes, without causing drowsiness. Sanofi-aventis will give the Allegra product to Chattem to convert to an over-the-counter version.
The Allegra OTC conversion is the first in a sanofi-aventis strategy of converting prescription drugs to OTC options. According to a sanofi-aventis press release, Chattem will play a key role in that OTC and consumer brands growth strategy.
“We believe our ability to convert prescription medicines to OTC products will be enhanced by Chattem's leading sales, marketing and distribution channels,” said sanofi-aventis CEO Christopher A.
Viehbacher in a press release. “We have great respect for Chattem's world-class management team, which has an excellent track record of sales and earnings growth based on building strong brands. With the potential access to switch products such as Allegra®, I believe this team will take Chattem to even higher levels."
Chattem shareholders should also benefit from sanofi-aventi’s purchase. Chattem provides sanofi-aventi with a platform into the United State’s market and sanofi-aventi will introduce Chattem products into emerging geographic market where sanofi-aventi already has a strong presence.
Chattem is home to a number of widely-known consumer products in the United States, including: Gold Bond, Icy Hot, ACT, Cortizone-10, Selsun Blue and Unisom.
The headquarters, manufacturing and leadership teams for Chattem will remain in Chattanooga and Chattem will form the base of the sanofi-aventis consumer healthcare business in the United States.
Sanofi purchased 100 percent of Chattem shares, at $93.50 per share, creating the world’s fifth-largest consumer healthcare company measured by product revenues. The $93.50 per share cost was a 34 percent premium to Chattem’s price on Friday, and a 44 percent premium over the average share price for the six months preceding the transaction.
The official transaction should complete in the first quarter of 2010 and was approved unanimously by Chattem’s Board of Directors.
According to the sanofi-aventi press release, positive earnings, as a result of the purchase of Chattem, are expected to be seen within the first year.
Comment and add to the story without registration, but keep the comments meaningful please. Links are not accepted.
