Reckitt Benckiser, the Anglo-Dutch household products giant, is to enter America's over-the-counter medicines market after agreeing to buy Adams Respiratory Therapeutics for $2.3 billion (£1.1 billion) in cash.

The acquisition of the Nasdaq-listed maker of Mucinex, the cough remedy, is Reckitt's first major foray into the US consumer health sector.

Mucinex will now become one of Reckitt’s “Powerbrands” — the narrow portfolio of key fast-growing products that the London-listed group picks out to promote globally.

Reckitt, whose existing brands include cleaning products Cillit Bang, Vanish and Lysol, sharply ramped up its presence in over-the-counter medicines last year when it acquired Boots Healthcare International (BHI), the maker of Neurofen and Clearasil in a £1.9 billion deal.

Bart Becht, the Reckitt chief executive, said that he expected to double the size of the Adams business within five years and lift margins to about 35 per cent — in line with those of BHI.

Adams, which is currently active only in the US, posted net sales of $332 million for the fiscal year to June 2007, up from $14 million in the year to June 2003. In its latest quarterly results, Adams reported a 22 per cent increase in net sales, to $110 million. Net income came in at $29.2 million, up from $16.2 million a year earlier.

Much of that growth came on the back of Mucinex, also known as guaifenesin, which was approved by the US Food and Drug Administration in 2002 as a treatment of chest congestion. Adams's sole other brand is Delsym, another cough remedy.

Mr Becht said: "We believe Adams' business has extremely good growth potential ... It will provide Reckitt Benckiser an entry into healthcare in the USA, the world's largest over-the-counter market."

Reckitt is looking to offer Mucinex outside the United States from 2010, he added.

For the past seven years, under Mr Becht's leadership, Reckitt has achieved a 7 per cent increase in net sales every year, against an industry average of about 3-5 per cent. Net profits have trebled since 1999, from £200 million to £768 million in 2006.

In October, Reckitt raised its full-year sales and profit targets after a better-than-expected third quarter.

At the same time, the FTSE-100 group said that the integration of BHI was ahead of schedule. It now expects cost savings from the deal for the year to be £5 million higher than previously expected, at £35 million.

Mr Becht, renowned as a fierce cost-cutter, said that the Adams acquisition would deliver "substantial" savings.

Reckitt said there would be a one-off charge of $60 million for the cost of integrating and restructuring Adams and further restructuring of the enlarged company.

Reckitt has agreed to pay $60 a share in cash for Adams, a 37 per cent premium to Friday's closing price. Adams shares jumped more than 35 per cent in premarket trading in New York on news of the deal.

The boards of both companies have approved the terms of the deal. The acquisition remains subject to conditions including clearance by the US competition authorities. Reckitt Benckiser was advised by Merrill Lynch; Adams by Morgan Stanley.

The deal will be financed by Reckitt Benckiser by cash on hand and existing credit facilities.

-------

$124 billion - value of global over-the-counter medicine market.

$22 billion - value of global cough and cold market, which is growing at about 5 per cent a year.

12% - share of net revenue Reckitt spends on advertising.

18 - number of Powerbrands Reckitt markets - they include Airwick, Lysol, Dettol, Strepsils, Vanish, Finish, Gaviscon, Lemsip, and Cillit Bang

Source: Times database

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive