Chattem CEO sees 'significant' growth

Chattem CEO sees 'significant' growth

December 23rd, 2009 by Mike Pare in Business

Chattem could be "significantly bigger" in five years as its acquisition by a French pharmaceutical titan brings new resources to capture more business, the Chattanooga company's chief said Tuesday.

"This was from the get-go ... the perfect combination," said Zan Guerry, Chattem's CEO, during a meeting with the head of Paris-based Sanofi-Aventis in Chattanooga.

Staff Photo by Matt Fields-Johnson Chris Viehbacher, CEO of Sanofi-Aventis Group, stands with Zan Guerry, CEO and chairman of Chattem Inc., outside Chattem's Chattanooga office Tuesday. The French firm bought the 130-year-old Chattem for $1.9 billion in cash.

Staff Photo by Matt Fields-Johnson Chris Viehbacher, CEO of...

Mr. Guerry and Sanofi-Aventis CEO Chris Viehbacher gathered with Chattanooga Mayor Ron Littlefield, Hamilton County Mayor Claude Ramsey and U.S. Rep. Zach Wamp, R-Tenn.

Mr. Viehbacher said that once the deal closes in early 2010, it will have people looking at expanding Chattem's product offerings in other parts of the globe.

Also, Sanofi-Aventis' plan to use Chattem to take allergy medicine Allegra from a prescription medicine to an over-the-counter drug itself offers a big upside, he said.


* Name: Chris Viehbacher

* Job: CEO of Sanofi-Aventis

* Age: 49

* Background: Holds German and Canadian citizenship.

* Education: Graduate in commerce of Queens University in Ontario, Canada; CPA

* Career: PriceWaterhouseCoopers; GlaxoSmithKline (1988-2008), where he acquired broad international experience in different positions across Europe, U.S., Canada; became CEO of Sanofi-Aventis in December 2008.

* Personal: Married with three children; speaks French, English and German

Mr. Viehbacher said products in the category of Allegra are more than $400 million a year in sales, which is close to Chattem's annual revenues for its entire portfolio.

"You see there could be substantial expansions of Chattem's operations. We have an exciting opportunity with Allegra," he said. "Clearly the whole objective of doing this deal is growth."

Mr. Littlefield said he has heard predictions of a doubling of Chattem's size.

"We won't recognize Chattem in five years," he said.

Mr. Ramsey said officials of both companies have given a lot of thought and effort to the deal, in which Sanofi-Aventis is paying $1.9 billion cash for Chattem.

"I think there will be long, lasting effect for (Chattem)," he said.

Rep. Wamp termed the deal "a perfect marriage" that bodes well for the continued renaissance of Chattanooga.

He said new manufacturing will be brought to the city as it experiences growth by companies already here and new jobs from businesses coming to Chattanooga.

Mr. Guerry and Mr. Viehbacher said it's full speed ahead on a new $35.5 million manufacturing facility off Broad Street on which construction has started.

"We need it up and running soon," Mr. Guerry said. "Wal-mart just gave us some very good news on more additions of Act (mouthwash)."

Mr. Guerry said that in his business, access to technology is the future. He said Sanofi-Aventis brings thousands of scientists to the collaboration.

Sanofi-Aventis' annual revenues in 2008 were about $40 billion, four times that of Chattanooga's biggest locally based company in Unum Group.

Mr. Viehbacher said the deal came about as a result of the Allegra switch.

"We did an extensive search of potential people with whom we could work," he said. The CEO noted it could partner with a business and let it do the changeover for Sanofi-Aventis, or it could find a company such as Chattem.

"We became impressed with Chattem," Mr. Viehbacher said. "Zan and I had an opportunity to get to know one another. We had a number of meetings. We were convinced of the collaboration and decided to move forward."