LINDA A. JOHNSON
TRENTON, N.J. (AP) ¿ French drugmaker Sanofi-Aventis SA said Monday it plans to buy U.S. health-care company Chattem Inc., maker of over-the-counter mainstays like Gold Bond skin products, for $1.9 billion in cash.
The deal also gives Sanofi-Aventis a distribution base for its popular allergy drug Allegra, which is awaiting approval to switch from prescription-only to an over-the-counter version, and for future switches of other drugs approaching the end of their patents.
Paris-based Sanofi-Aventis said it will offer $93.50 per share ¿ 44 percent more than Chattem's average price over the past six months. The Chattanooga, Tenn., company makes two dozen consumer health care products, including Icy Hot pain relief medicine and Selsun Blue shampoo.Chattem shares skyrocketed on the news, jumping $22.96, or 33 percent, to $92.94 in afternoon trading. In New York trading, Sanofi-Aventis shares edged up 15 cents to $39.26. "Chattem is the ideal entry for us in this market," Sanofi Chief Executive Chris Viehbacher told reporters during a conference call. Chattem ranks among the top 10 U.S. consumer health companies but sells little in other countries. But it has the highest operating profit margin in the business at nearly 35 percent, far better than the 20 percent or below at what Viehbacher called "the big boys," Procter & Gamble and Johnson & Johnson Consumer Health Care.