Sanofi-aventis increases footprint in US with Chattem acquisition

By Simon Pitman

- Last updated on GMT

Related tags Personal care Over-the-counter drug

France-based pharmaceutical group Sanofi-aventis has increased its presence in the US market and expanded into personal care with the acquisition of Chattem.

Sanofi-aventis has paid $1.9bn (€1.3bn) for all the outstanding shares in the US-based health and consumer player, which produces a range of specialised toiletry and personal care products mainly for the North American market.

The deal creates the fifth largest consumer goods company in the world by revenues, and serves as a means of broadening the consumer healthcare platform for Sanofi-aventis, as well as giving it more leverage in the important US market.

The French company says that one of the principle reasons for buying the business is that it focuses on its core objective to expand its OTC business worldwide.

"The acquisition of Chattem will be a significant milestone in Sanofi-aventis' transformation strategy and will provide us with the ideal platform in the US consumer healthcare market, which represents 25 percent of the current worldwide opportunity​," said Christopher Viehbacher, CEO of Sanofi-aventis.

Sanofi-aventis is already present in the OTC and consumer healthcare sector in various markets throughout the world, contributing to a €1.4bn turnover, but the company is not yet present in the United States.

The company says that by increasing its presence in the OTC segment, it will also develop more of its prescription drugs into OTC treatments, and is currently seeking to convert its antihistamine brand known as Allegra in the United States from a prescription medicine to an OTC product.

The move is also 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’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.

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