Stock Groups

Philip Morris International bids $16 billion for Swedish Match


Swedish Match’s main source of income is Swedish-style tobacco snuffs. Also known as’snus’

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Marlboro-maker Philip Morris InternationalOn Wednesday, a $16 Billion bid was confirmed to purchase a rival Swedish MatchAs part of their rapid push for smoke-free options.

The shares of the Stockholm-based company reached record levels in early trade following the acceptance by its board to the U.S. Swiss tobacco giant’s 161.2 billion krona cash deal.

Since Friday’s announcement of talks between the companies, Swedish Match trades at 32% more than it did on Friday. Philip Morris International is now trading at a marginally higher price after a turbulent ride.

This deal is subject to shareholder approval. It marks the latest stage in Philip Morris International’s continuing efforts to decrease its dependence on traditional cigarettes, despite growing scrutiny from the public.

Market leader in smoking-free “snus”

Swedish Match, an 107-year old Swedish Match, is most well-known for its traditional Swedish-style snuffs.

Although they are illegal in the EU for health reasons, Swedish Match’s General Snus were granted authorizationThe U.S. Food and Drug Administration voted in 2019 to approve the following findings: “mouth cancer and heart disease are less likely with this drug.” [and]Lung cancer is more common than smoking.

The FDA did not approve these products and noted that they weren’t safe. It added that all tobacco products could be harmful or addictive.

Philip Morris International’s offer for Stockholm-based Swedish Match is part of its larger plans beyond traditional cigarettes.

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In the meantime, Zyn, its brand-new, nicotine-free pouches has been a major contributor to rapid company growth. This is in response to increasing consumer demand for alternatives to cigarettes.

Swedish Match released its first quarter earnings Wednesday. It reported significant sales growth and increased profits in Zyn’s U.S. with 35% more deliveries.

Now, the U.S. is Sweden’s second largest market. Zyn pouches are the dominant product in an increasingly competitive market. British American Tobacco PLC Altria GroupPhilip Morris International was founded in 2008 from this company.

Philip Morris quits smoking

Philip Morris International has its headquarters in the U.S. but doesn’t sell products there. Rather, it distributes its products internationally, including Marlboro cigarettes, L&M, Lark and Philip Morris.

It aims to get back access to the distribution network it used to have in its former owner’s territory with this deal.

Philip Morris International is making this latest attempt to diversify its revenue streams beyond tobacco-based traditional sources. In 2021 it signed an agreement to acquire the company. asthma drug develop Vectura Group, who is also responsible to create the IQOS heated-tobacco systems.

Last year, approximately 29% (or $31.4 billion) of company net revenues came from its smoke-free portfolio.

Campaign groups denounce tobacco companies, who are known for denial of the harmful effects of smoking.

Other smokeless tobacco products that Swedish Match sells include America’s best chew, which is a chewing-tobacco product and Longhorn, which is a brand of moist snuff.

Philip Morris International said completing the offer was conditional on regulatory approval and on no other company making an offer.

Credit Suisse’s analysts wrote in a note that possible counterbids seem unlikely. Japan Tobacco International is not interested in entering the U.S. Market, however, British American Tobacco (and others) are. ImperialDue to concerns about antitrust in Scandinavia and the U.S., they would hesitate.

—CNBC’s Sam Meredith contributed to this article.