Malboro maker Philip Morris International (PMI) is in talks to acquire European smokeless tobacco rival Swedish Match for an estimated $15bn (£12bn).
As first reported by the Wall Street Journal, the tie-up would help the cigarette giant’s ambitions to generate more than 50 per cent of revenue from smoke-free products.
Philip Morris confirmed the reports with City A.M. this afternoon, stating that “discussions are ongoing”. The firm added: “The discussions are in progress and it is uncertain whether an offer will be made”.
It comes after the company 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.
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.
Meanwhile, Swedish Match reported record full year sales and operating profit with double-digit growth in both revenues and earnings.
The majority of its products are sold in the US and Scandinavia, and the company develops and manufactures a variety of products, including Smokefree, Cigars, and Lights.