Philip Morris, Altria’s Possible Merger Could Allow The Tobacco Giants To Dominate International E-Cigarette Market
Philip Morris and Altria Group may reunite after more than 10 years. The merger has the potential to super-charge efforts by Juul -- which Atria has a stake in -- to expand overseas, bolstered by the global marketing power of Philip Morris.
The New York Times:
Philip Morris And Altria Are In Talks To Merge
The tobacco giants Philip Morris International and the Altria Group are in talks to reunite, the companies said on Tuesday, in a deal that would combine the most popular brands of both traditional and electronic cigarettes. The merger would be a boost for Altria’s investment in Juul, the e-cigarette juggernaut. Juul has been trying to expand overseas, but it lacks the global distribution network of Philip Morris, which has grown since it was spun off from Altria in 2008. (Kaplan, 8/27)
The Associated Press:
A Decade After A Split, The Marlboro Men Seek A Reunion
Philip Morris said Tuesday that there is no guarantee of success in what would be an all-stock deal. But analysts said the merger is likely to pass muster with anti-trust regulators. Both companies have been investing in alternatives to traditional cigarettes amid declining use. The companies are already partnering on the U.S. launch of a heat-not-burn cigarette alternative, iQOS, made by Philip Morris. Separately, Altria has taken a roughly $13 billion-dollar stake in vaping giant Juul, betting on more smokers switching to electronic cigarettes. (Perrone, 8/27)
Reuters:
Philip Morris And Altria In Merger Talks As Marlboro Fades And E-Cigs Light Up
The board of the combined company would be split evenly between Philip Morris and Altria directors, the source said. If the deal negotiations prove successful, an agreement could be reached by the end of September, the source added. The two U.S.-headquartered companies separated 11 years ago to focus on different geographic markets, at a time when tobacco stocks generated steady yields. Since then, the industry has been disrupted by a move away from traditional smoking into e-cigarettes and vaping. (Kumar and Roumeliotis, 8/27)
CNBC:
Philip Morris International, Altria Confirm Merger Talks To Reunite
Analysts have long speculated that the two companies would come back together. The talks come at a time when cigarette sales are falling and both companies are searching for new ways to grow. Combining Altria and PMI would create a global tobacco powerhouse with investments in e-cigarettes and cannabis. PMI’s shares lost nearly 8% on Tuesday, closing at $71.70 a share, while Altria’s fell about 4%, closing at $45.25 a share. PMI’s shares were pressured Monday amid merger speculation. (Faber and LaVito, 8/27)
The Wall Street Journal:
Falling Tobacco Demand Spurs Philip Morris, Altria To Talk Merger
The discussions are also motivated by the risks—and opportunities—that Juul presents for both companies as the startup expands outside the U.S., the people said. Philip Morris is the bigger of the two companies both in terms of revenue and market value. Based on share prices before the companies disclosed their talks early Tuesday, Philip Morris had a market capitalization of about $121 billion and Altria sported a market value of roughly $88 billion. (Maloney and Lombardo, 8/27)
