Malboro maker Philip Morris snaps up smokeless cigarette rival Swedish Match for £13bn
Malboro maker Philip Morris International (PMI) has agreed to snap up European smokeless tobacco rival Swedish Match for $16n (£13bn) in a push to expand its tobacco alternatives.
Whilst PMI confirmed the reports with Morning Wire earlier this week, stating that “discussions are ongoing”, the firm confirmed it had made a cash offer for the Stockholm group at 106 crowns per share.
Swedish Match makes the majority of its profit from moist snuff called “snus”, with new Zyn tobacco-free nicotine pouches expanding in Scandinavia and the United States.
It recently reported record full year sales and operating profit with double-digit growth in both revenues and earnings.
Since 2008, PMI has invested more than $9bn to develop, scientifically substantiate and commercialise innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes.
However, PMI cut its full-year earnings forecast a few weeks back after it reduced Russian operations and felt the sting of rising prices.
PMI’s first-quarter earnings fell over three per cent to $2.32bn, or $1.50 per share, and the firm also reduced its 2022 adjusted earnings per share to between $5.45 and $5.56 from between $6.12 and $6.30.
Commenting on the move, Jorge Alday, Partner at STOP, the tobacco industry watchdog, said: “Philip Morris International may be moving the deckchairs around by buying Swedish Match but, like its pharmaceutical company acquisitions last year, it doesn’t change the fact that PMI is still one of the world’s biggest cigarette companies
“Adding new snus and nicotine pouches to its portfolio just gives it another way to replace customers who are quitting tobacco or dying from its core product; these products are reported to appeal to youth and non-smokers.”