• Ad Age, Monday, October 9, 2006 12:45 PM

In order to smooth the way for Johnson & Johnson's pending $16.6 billion acquisition of Pfizer's consumer-products business, the companies have sold five drug and personal-care brands to Chattem for $410 million. They are Act oral rinse, Balmex diaper-rash ointment, Kaopectate, Unisom, and Cortizone. A J&J spokesman said no divestitures have been required yet as part of the Federal Trade Commission review of the deal, but the divestitures had been made to "facilitate FTC clearance." People familiar with the matter said that strategic factors also factored in, as J&J decided which brands it wanted to keep in cases where incoming Pfizer brands compete in the same categories. The deal, for example, will bring to J&J Pfizer's Plax and Desitin--close competitors of the Act and Balmex brands that J&J is divesting. Pfizer is divesting the Kaopectate and Cortizone brands, as J&J opted to keep its existing brands Immodium and Cortaid instead. "These brands are responsive to advertising and can be extended with new products, which plays perfectly into our proven track record," says Zan Guerry, chairman-CEO of Chattem.

Read the whole story at Ad Age »