Chattem's outstanding debt to be assumed by Sanofi via acquisition

By Jennifer Lanning Drey

Portland, Ore., Dec. 21 - Sanofi-Aventis SA will assume all of Chattem Inc.'s outstanding debt through a $1.9 billion transaction in which Sanofi will obtain 100% of the outstanding shares of Chattem, Bob Bosworth, president and chief operating officer of Chattem, said Monday during a conference call held to discuss the transaction.

Chattem reported total debt of $399.9 million at the Aug. 31 end of the fiscal third quarter.

Under the terms of the acquisition agreement, Sanofi will commence a tender offer for all outstanding shares of Chattem at $93.50 per share.

The tender offer is conditioned on the tender of a majority of Chattem's shares calculated on a diluted basis as well as the receipt of certain regulatory conditions.

Following the successful completion of the tender offer, a wholly owned subsidiary of Sanofi will merge with Chattem and the outstanding Chattem shares not tendered in the tender offer will be converted into the right to receive the same $93.50 per share in cash paid in the tender offer.

Due to the structure of the tender offer and the complementary nature of the two businesses, Chattem expects a "clear and speedy path to closing," Bosworth said Monday.

Sanofi plans to commence the tender offer in early January and to complete the transaction in the first quarter, he said.

"By putting these two complementary companies together, we are creating tremendous growth opportunity," Zan Guerry, chief executive officer of Chattem, said during the call.

Chattem's board of directors has unanimously approved the transaction.

Over-the-counter and consumer brands are core growth platforms identified in Sanofi's broader strategy for achieving sustainable growth, according to a joint news release.

Based in Paris, Sanofi-Aventis is a pharmaceutical company.

Chattem is a Chattanooga, Tenn.-based marketer and manufacturer of branded consumer products.

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