SEC charges two over Sanofi-Chattem insider dealing
France-based Sanofi-Aventis announced the acquisition of Tennessee-based personal care provider Chattem on December 21.
In an official statement, the SEC said that it had frozen the assets of Nicolas Patrick Benoit Condroyer and Gilles Robert Roger, who reside in Brussels, Belgium, claiming that the two individuals had purchased hundreds of ‘out-of-the-money’ call option contracts for stock in Chattem.
Illicit profit of $4.2m
Condroyer and Roger purchased the contracts in newly-opened US option brokerage accounts and then sold their options on the day the acquisition was announced, making an illicit profit of $4.2m.
"These two men tried to take advantage of the marketplace and cash in on millions of dollars in illegal trades," said William P. Hicks, Regional Trial Counsel at the SEC. "Fortunately they were caught in the act and the money was successfully frozen."
Pharmaceutical giant Sanofi-aventis paid $1.9bn (€1.3bn) for all the outstanding shares in the US-based health and consumer player, which produces a range of specialized toiletry and personal care products mainly for the North American market.
Sanofi-Aventis now 5th largest consumer goods player
The deal creates the fifth largest consumer goods company in the world by revenues, and serves as a means of broadening the consumer healthcare platform for Sanofi-aventis, as well as giving it more leverage in the important US market.
The French company says that one of the principle reasons for buying the business is that it focuses on its core objective to expand its OTC business worldwide.
Chattem’s portfolio currently holds 24 brands, five of which were bought from Johnson & Johnson in a $410m deal back in 2007, which included ACT mouthwash and Balmex diaper rash ointment.
Other personal care brands include Sun-In, Bullfrog Sunblock, Selsun Blue and Aspercreme, which are sold at major drug stores and mass retailers such as Walgreens and Walmart.
As well as its mainstay market penetration in the United States, the company also supplies parts of Europe, Canada, Latin America and the Caribbean.
