Philip Morris International and Altria in mega £171bn tobacco merger
- The tie-up would reunite the suppliers of Marlboro cigarettes
- Altria took over Marlboro in the US after its separation from Philip Morris in 2008
Tobacco giants Philip Morris International and Altria are in talks to reunite in a blockbuster £171billion deal.
It comes as both seek to get ahead in the rapidly expanding vaping market to offset dwindling sales of traditional cigarettes.
The tie-up would reunite the suppliers of Marlboro cigarettes. Altria took over Marlboro sales in the US after its separation from Philip Morris in 2008. It has stayed a largely US-focused company since, with Philip Morris focusing on overseas sales.
Blockbuster deal: The tie-up would reunite the suppliers of Marlboro cigarettes
Customers in the West have ditched smoking for e-cigarettes and heated tobacco and Altria last year agreed to buy a 35 per cent stake in Juul Labs, one of the world’s biggest vaping companies, for £10.5billion.
The companies confirmed the talks but stressed that they are at an early stage. Any deal would need to get a green light from each company’s board, shareholders and regulators.
Confirmation of the talks came after Wells Fargo analyst Bonnie Herzog said on Monday that Philip Morris would be an ideal partner for Juul’s international expansion.
US regulators are taking on e-cigarettes, removing some products from the market and blaming them for encouraging teens to start vaping with wacky flavours.
Jefferies analyst Ryan Tomkins said: ‘While this merger makes sense and will create a more valuable company when combined, we do think it is strange timing given possible risk to Juul in the US with regards to regulatory action.’
Philip Morris’s annual turnover is around £24billion a year, while Altria makes £16billion.