PARIS - French drug maker Sanofi-Aventis SA said Monday it has agreed to buy U.S. health-care company Chattem Inc. for about US$1.9 billion in cash in a deal it said would create the world's fifth-largest consumer healthcare company.

Paris-based Sanofi-Aventis said it will offer $93.50 per share to acquire 100 per cent of Chattem, a Chattanooga, Tenn., maker of consumer health-care products such as Gold Bond skin care creams and Icy Hot pain relief medecine.

"Chattem is the ideal entry for us in this market," Sanofi chief executive Chris Viehbacher told reporters during a conference call.

Both companies have operations in Canada as well as the United States and elsewhere.

Chattem's Canadian subsidiary, based near Toronto in Mississauga, Ont., sells a variety of products including Aspercreme, Flexall, Pamprin, Selsun Blue and the more prominent Gold Bond and Icy Hot.

Sanofi-Aventis Canada Inc. is headquartered in Laval, Que. and employs 900 people that produce medications for Canada, the United States and other countries.

Another member of the Sanofi group, Sanofi Pasteur Ltd. of Toronto, is Canada's largest producer of vaccines and employs 1,200 people.

The acquisition of Chattem is part of a strategy by Sanofi and other top pharmaceutical companies to diversify, particularly into areas with stable product revenue as they face a wave of patent expirations in the next several years.

In a statement, Sanofi-Aventis said it will launch its public tender offer for Chattem in January, and it expects to complete the acquisition in the first quarter of 2010.

Chattem's management will remain in place following the takeover, Sanofi-Aventis said.

Sanofi-Aventis said it would maintain both of Chattem's existing manufacturing facilities in Chattanooga and will continue construction on a third.

Last year Chattem had 488 employees and reported revenue of $455 million.

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