SAN FRANCISCO -- Chiron Corp. said yesterday its board of directors accepted a sweetened $5.1 billion takeover offer from the Swiss drug giant Novartis AG, which vowed to ''turn around" the beleaguered flu-shot maker.
Novartis already owns 42 percent of Chiron, which touched off a public-health crisis in the United States last year when it failed to deliver half of the nation's expected stockpile of flu vaccine.
Chiron, which is based in Emeryville, Calif., had rejected a previous offer of $4.5 billion, or $40 a share, as inadequate.
The improved bid of $45 a share represent a 23 percent premium to Chiron's closing price on Aug. 31, the last trading day before Novartis's original bid.
The deal must still be approved by regulators and a majority of the stock holders of the 113 million outstanding shares Novartis doesn't own.
Chiron's directors who don't have ties to Novartis recommended shareholders approve the deal.
Analysts said Novartis is buying Chiron for two major reasons: It wants to protect a sizable investment and the once-sleepy vaccine market is heating up because of global concerns about a bird-flu pandemic.
''Certainly, given all of Chiron's woes over the last 18 months, it makes good sense for Novartis to protect one of its largest investments," said Jennifer Chao, a Deutsche Bank analyst. ''It also gives Novartis exposure to one of the fastest growing markets in the pharmaceutical industry."
Chiron chief executive Howard Pien said he expects the deal to close in the first half of 2006.
Chiron's stock rose 74 cents to close at $44.14 on the Nasdaq Stock Market yesterday. US shares of Novartis rose 42 cents to $53.82 on the New York Stock Exchange.