Updated from 6:42 a.m. EST

Seven weeks after it rejected a Novartis ( NVS) buyout bid as inadequate, Chiron ( CHIR) accepted a sweetened offer worth about $5.1 billion.

The new bid from Novartis is $45 a share -- up from $40 a share offered in early September -- for the 58% of Chiron that the Swiss drug giant doesn't own.

Monday's new offer represents a premium of less than 4% from Chiron's closing price on Friday and a 23% premium to Chiron's closing price on Aug. 31, the day before Novartis offered $40 a share. The new proposal tops the old bid by about $565 million.

The companies expect the deal to close during the first half of next year. The offer must be approved by a majority of the non-Novartis shareholders in Chiron, as well as by U.S. and European regulators. About 113 million Chiron shares aren't held by Novartis.

The announcement was viewed on Wall Street as an answer to the questions "when" and "how much" rather than "if." After Novartis made its $40 a share bid, Chiron's stock bounced above, and stayed above, that level, prompting analysts to predict that Novartis would raise its offer.

Alternative scenarios included the prospect of another company making a bigger bid or Chiron being broken up in pieces that might be worth more than the whole. The Novartis bid was the simplest choice. Chiron's directors, excluding the three Novartis designees who didn't vote, supported the $45 a share offer unanimously.

"As stated in our note following the $40 a share bid, we did not expect Novartis to offer a significant premium for Chiron's shares," says David Molowa of UBS Securities in a Monday research note.

He doesn't own shares, but his firm has had an investment banking relationship with both companies. He has a buy rating on Novartis, and he raised his rating on Chiron to neutral from reduce.

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