Sanofi-aventis to Acquire Chattem Inc. Creating a Strong U.S. Consumer Healthcare Platform

sanofi-aventisSanofi-aventis (EURONEXT: SAN and NYSE: SNY) and Chattem, Inc. (NASDAQ: CHTT) have entered into a definitive agreement under which sanofi-aventis is to acquire 100 percent of the outstanding shares of Chattem in a cash tender offer for $93.50 per share, or approximately $1.9 billion. The transaction will create the world's fifth-largest consumer healthcare company measured by product revenues by combining Chattem's position as a leading U.S. consumer healthcare company with sanofiaventis' strong international presence in the sector.

Over-the-counter ("OTC") and consumer brands are core growth platforms identified in sanofi-aventis' broader strategy for achieving sustainable growth. Although the Group will generate around 1.4 billion euros worldwide in OTC sales in 2009, it has thus far not been directly present in the United States.

Chattem is approximately 130 years old and is a leading manufacturer and marketer of branded consumer healthcare products, toiletries and dietary supplements across niche market segments in the United States. Chattem has regularly demonstrated its ability to sustain regular growth, both in terms of sales and profit, through the development of its own brands and the successful integration of acquired products. Chattem's well known brands include Gold Bond®, Icy Hot®, ACT®, Cortizone-10®, Selsun Blue® and Unisom®.

Sanofi-aventis also announced today that it will seek to convert its antihistamine brand known as Allegra® (fexofenadine HCl) in the United States from a prescription medicine to an OTC product. Allegra® is a well recognized brand name with both physicians and consumers. Upon Allegra®'s conversion, Chattem will assume responsibility for the Allegra® brand as part of becoming the platform for sanofi-aventis' U.S. OTC and consumer healthcare business.

"The acquisition of Chattem will be a significant milestone in sanofi-aventis' transformation strategy and will provide us with the ideal platform in the U.S. consumer healthcare market, which represents 25 percent of the current worldwide opportunity," said Christopher A. Viehbacher, Chief Executive Officer of sanofi-aventis. "In addition, we believe our ability to convert prescription medicines to OTC products will be enhanced by Chattem's leading sales, marketing and distribution channels. We have great respect for Chattem's world-class management team, which has an excellent track record of sales and earnings growth based on building strong brands. With the potential access to switch products such as Allegra®, I believe this team will take Chattem to even higher levels."

"This transaction offers immediate and significant value for Chattem's shareholders and important benefits to our employees, customers and community," said Zan Guerry, Chairman and Chief Executive Officer of Chattem. "I am excited to work with the sanofi-aventis team to capture the significant growth opportunities this combination creates, as highlighted by the planned launch of Allegra®. Chattem will form the base of a new consumer healthcare business in the United States for sanofi-aventis, and the headquarters, manufacturing and leadership team will continue to be based in Chattanooga."

Under the terms of the agreement, sanofi-aventis will commence a tender offer for all outstanding shares of Chattem at $ 93.50 per share in cash. The offer price represents a 34 percent premium above the closing price of Chattem's shares on December 18, 2009 and a 44 percent premium above the average closing price of Chattem’s shares during the 6 months preceding the announcement of the transaction. 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 approvals and other customary closing conditions. Following the successful completion of the tender offer, a wholly owned subsidiary of sanofi-aventis 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. The tender offer will commence in January 2010 and the companies anticipate the transaction will close in the first quarter of 2010. Chattem's Board of Directors has unanimously approved the transaction.

The transaction is expected to be accretive to sanofi-aventis' earnings as early as year one. This acquisition will allow sanofi-aventis to optimize and retain the full value of the Allegra® switch to an OTC product. Also, significant revenue synergies should be obtained through the expansion of Chattem's products into geographic markets where sanofi-aventis has a strong operating presence, particularly in emerging markets.

Zan Guerry and the senior leadership team of Chattem have agreed to lead sanofi-aventis' U.S. consumer health division following the close of the transaction. Additionally, sanofi-aventis is committed to Chattem's current operations and entrepreneurial spirit as it builds a sizeable presence in the U.S. consumer healthcare market. Sanofi-aventis announced it would maintain both of Chattem’s existing manufacturing facilities and will continue construction on the third. The corporate brand of Chattem will also be maintained.

About sanofi-aventis
Sanofi-aventis, a leading global pharmaceutical company, discovers, develops and distributes therapeutic solutions to improve the lives of everyone. Sanofi-aventis is listed in Paris (EURONEXT: SAN) and in New York (NYSE: SNY). For more information, visit: www.sanofi-aventis.us or www.sanofi-aventis.com.

About Chattem
Chattem, Inc. is a leading marketer and manufacturer of a broad portfolio of branded OTC healthcare products, toiletries and dietary supplements. The Company's products target niche market segments and are among the market leaders in their respective categories across food, drug and mass merchandisers. The Company's portfolio of products includes well-recognized brands such as Icy Hot®, Gold Bond®, Selsun Blue®, ACT®, Cortizone-10® and Unisom®. Chattem conducts a portion of its global business through subsidiaries in the United Kingdom, Ireland and Canada. For more information, please visit the Company's website: www.chattem.com.

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