12 October 2006

Chattem buys J&J, Pfizer brands

Chattem Inc. will pay $410 million to pick up U.S. rights to five brands, including Balmex diaper rash treatment, from Johnson & Johnson and Pfizer Inc.

The deal is a result of the blockbuster pact in June where Johnson & Johnson bought Pfizer’s consumer health-care business for $16.6 billion.

Chattem said its agreement was subject to regulatory review and certain closing conditions, including the completion of Johnson & Johnson’s purchase of the Pfizer business, which should close by the end of 2006.

The brands purchased include anti-cavity mouthwash ACT, sleep aid Unisom, anti-itch salve Cortisone, anti-diarrhea drug Kaopectate, and Balmex.

Chattanooga, Tenn.-based Chattem, whose products include Season Blue dandruff shampoo and Gold Bond anti-inch powders, said the deal would add to its earnings per share in fiscal 2007.

“These brands are responsive to advertising and can be extended with new products, which plays perfectly into our proven track record of growing brands through innovation and advertising,” said Zane Gerry, Chattem's chair and chief executive.

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