Philip Morris International in Talks to Buy European Smokeless-Tobacco Rival

Date:

Tie-up would help accelerate PMI’s effort to generate more than 50% of revenue from smoke-free products

Philip Morris International Inc. PM -1.02% is in advanced talks to acquire Swedish Match AB, SWMA -0.05% according to people familiar with the matter, in a deal that could be valued at $15 billion or more and bolster the tobacco giant’s exposure to the rapidly growing market for smoke-free brands.

The talks between U.S.-based Philip Morris and Stockholm-based Swedish Match could yield a deal as soon as this week, the people said, cautioning that the talks could still fall apart. The potential terms and contours of any deal couldn’t be learned.

The companies confirmed the talks in separate statements after The Wall Street Journal reported on the potential deal Monday morning.

Swedish Match was valued at about 117 billion Swedish krona, or almost $12 billion. With a typical premium, it could be valued at $15 billion or more. Philip Morris has a market value of about $155 billion.

Shares in Philip Morris closed up less than 1% on a day when the markets swooned. U.S.-listed shares of Swedish Match jumped about 20%; trading in Stockholm was closed.

In the U.S.—Swedish Match’s largest market, followed by Scandinavia—the company’s ZYN nicotine-pouch brand dominates a market that includes rival offerings from Altria Group Inc. and British American Tobacco PLC, according to Swedish Match’s website. The U.S. Food and Drug Administration in 2019 authorized Swedish Match to market its General Snus smokeless-tobacco products as presenting a lower risk of mouth cancer, heart disease and lung cancer than cigarettes.

Read full article here.

Ben Dummett, Cara Lombardo – Wall Street Journal – 2022-05-09.

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