Global Rollout
PMI will also achieve a more efficient rollout of iQOS as a merged entity.
Calling iQOS a “key catalyst” for the merger, Herzog said iQOS “has the potential to change the trajectory of smoking, attitudes toward risk and the regulatory constraints on smoking behavior.”
Conversion rates of 60% to 70% in other key markets indicate iQOS can reach “critical mass” of 2% to 3% of smoker share within a year or two in any given market.
Others agree. “With the current regulatory climate and a potential U.S. administration that is seen as more business-friendly, the time may be right for Altria and [PMI] to join as one and streamline the sales of tobacco products globally,” said Christopher Davis, research analyst for Seeking Alpha, New York.
Officials with Altria declined comment on the potential move, while officials with PMI did not comment by press time.