The tender offer to buy all the outstanding shares in the company was sealed after withdrawal rights expired on February 8, which means that in excess of 18 million shares will be secured by Sanofi-Aventis.
The company will buy the shares at the agreed price of $93.50 per share, which means it will pay a total of $1.9bn (€1.3bn) for the business, helping to create the fifth largest consumer goods company in the world.
Finalising the deal also means that Sanofi-Aventis now holds a 90 percent majority stake in the Chattem business, which will become an indirect, wholly-owned subsidiary.
Platform for further worldwide expansion
The France-based pharmaceutical and health care player says it has acquired the business as a means of expanding its worldwide OTC footprint, and more specifically to give it an increased platform in the US market, in line with its transformation strategy.
In an official statement Sanofi-Aventis said that the deal would specifically strengthen its presence in the US healthcare market, ‘which represents 25 percent of the current worldwide opportunity’, while also ‘building a significant platform for future growth’.
The deal has also attracted some negative publicity for Sanofi-Aventis, after The New York-based Securities and Exchange Commission has filed charges against two French nationals, accusing them of insider trading over the sale of Chattem.
SEC prosecutes over inside trading
In an official statement made at the beginning of January, the SEC said that it had frozen the assets of Nicolas Patrick Benoit Condroyer and Gilles Robert Roger, who reside in Brussels, Belgium, claiming that the two individuals had purchased hundreds of ‘out-of-the-money’ call option contracts for stock in Chattem.
Condroyer and Roger purchased the contracts in newly-opened US option brokerage accounts and then sold their options on the day the acquisition was announced, making an illicit profit of $4.2m.
The acquisition is the company’s first foray into the cosmetics and personal care sector, with Chattem’s broad portfolio in this area opening up brand new opportunities.
Chattem holds 24 major brands
Chattem’s portfolio currently holds 24 brands, five of which were bought from Johnson & Johnson in a $410m deal back in 2007, which included ACT mouthwash and Balmex diaper rash ointment.
Other personal care brands include Sun-In, Bullfrog Sunblock, Selsun Blue and Aspercreme, which are sold at major drug stores and mass retailers such as Walgreens and Walmart.
As well as its mainstay market penetration in the United States, the company also supplies parts of Europe, Canada, Latin America and the Caribbean.
Approximately two thirds of the company’s products are manufactured at its production facility in Chattanooga, Tennessee, which is also the company’s headquarters and will continue to serve as the divisional headquarters for Sanofi-aventis.