NEW YORK and RICHMOND, Va. — Philip Morris International Inc. (PMI) is in talks to acquire Swedish Match AB, the two tobacco companies confirmed Monday, although if and when a deal might take place is uncertain.
“Philip Morris International Inc. today confirmed, in response to recent market speculation, that discussions are ongoing between PMI and Swedish Match AB regarding a potential offer for the company,” PMI said in a statement. “The discussions are in progress, and it is uncertain whether an offer will be made. PMI intends to make no further comment regarding the discussions unless and until it is appropriate to do so.”
The deal could be valued at $15 billion or more and bolster the tobacco giant’s exposure to the growing market for smoke-free brands, according to a Wall Street Journal report. PMI would be acquiring Swedish Match’s operations that make smoke-free products, as well as cigars, matches and lighters, too, the newspaper reported.
“The board of directors of Swedish Match AB has noted the recent speculation and confirms that discussions with Philip Morris International Inc. regarding a possible public takeover offer for Swedish Match are ongoing,” Swedish Match said. “There can be no certainty that an offer will be made, nor as to the terms of any such potential offer.”
While widely known as a cigarette company, New York-based PMI is working to change that image, it said on its website. It’s aiming to have smoke-free products—like heat-not-burn device IQOS—make up half of its revenues by 2025.
PMI has already made several acquisition moves to further this strategy. In late 2021, it acquired Vejle, Denmark-based Fertin Pharma, a leading developer and manufacturer of pharmaceutical products based on oral and intra-oral delivery systems. It also put in an unconditional offer for Chippenham, U.K.-based Vectura Group PLC, a provider of inhaled drug delivery solutions.
PMI still sells Marlboro cigarettes outside of the United States (Philip Morris USA, an Altria company, sells the brand in the U.S.) and other brands including Chesterfield, L&M, Lark and Philip Morris. Cigarette sales have been seeing declines for years as consumers search for healthier alternatives.
Stockholm-based Swedish Match, which has U.S. headquarters in Richmond, Va., is also moving toward being a smoke-free company. It was going to spin off its cigar business; however, it announced in March that it was halting these efforts until it cleared up some regulatory questions. The company’s smoke-free product Zyn is the No. 1 nicotine pouch brand in the United States, and shipped nearly 198 million cans worldwide in 2021, according to its 2021 annual report.
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