Reckitt Benckiser Buys Adams Respiratory

British household cleaning and personal care products maker Reckitt Benckiser Group PLC said Monday it will purchase U.S. over-the-counter drug maker Adams Respiratory Therapeutics Inc. for $2.3 billion in cash in a move to enter the U.S. consumer health care market.

Reckitt Benckiser, which makes Lysol disinfectant and Woolite laundry detergent, will pay $60 per share for Chester, N.J.-based Adams, which represents a 37 percent premium to the stock's $43.68 closing price on Friday.

The deal has been approved by the boards of both companies. Reckitt Benckiser will finance the acquisition with cash on hand and existing credit facilities.

With about 500 employees, Adams makes and markets adult expectorant Mucinex and cough suppressant Delsym. For the fiscal year ended in June, the company had sales of $332 million.

"Adams will add to our portfolio a new, rapidly growing power brand in Mucinex, a market and innovation leader in cough and congestion relief in the USA," said Bart Becht, chief executive of Reckitt Benckiser. "Equally important, it will provide Reckitt Benckiser an entry into health care in the USA, the world's largest OTC market."

Reckitt said it expects the deal to add immediately to earnings, excluding a one-time restructuring charge of $60 million. The acquisition remains subject to antitrust approvals in North America.

Merrill Lynch served as adviser to Reckitt Benckiser and Morgan Stanley served as financial adviser to Adams.