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Chattem purchase

This article was originally published in The Rose Sheet

Executive Summary

Johnson & Johnson's anti-cavity mouthwash brand ACT will be acquired by Chattem under an agreement in which the firm will pay $410 mil. in cash for five J&J and Pfizer Consumer Healthcare brands, Chattem announces Oct. 6. The transaction is subject to review and approval by the Federal Trade Commission and certain closing conditions, including J&J's acquisition of the Pfizer Consumer Healthcare division, which is expected to close by the end of the year (1"The Rose Sheet" July 3, 2006, p. 7). ACT would represent Chattem's first mouthwash brand; the firm also plans to acquire OTC brands Unisom, Cortizone, Kaopectate and Balmex. "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," Chattem says. The pending transaction will be accretive to Chattem's earnings per share in 2007 and provides "excellent long-term growth opportunities for both sales and earnings," firm says...

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