Wednesday, December, 11, 2019 10:32:22
  • The reason behind the collaboration can be to face the decreasing cigarette sales, which dropped internationally by 4.5% last year.

  • Altria and Philip Morris International (PMI) are Marlboro cigarette makers, Altria sells cigarettes in the United States while PMI sells cigarettes across the world.

Marlboro-maker Altria and Philip Morris International, are currently in talks to re-unite their businesses, a deal that could birth a $200 billion industry powerhouse. Philip Morris, with a valuation of approximately $120 billion, and Altria, valued at over $88 billion, making the strong $200 billion plus deal.

The news of the talks hit share prices of cigarette rivals with shares of British American Tobacco falling down by 3%. Altria, the largest investor in Juul Labs, leading e-cigarette seller, spun-off the business of Philip Morris in 2008. The confirmation of talks between companies came after analyst of Wells Fargo, Bonnie Herzog stated that Juul; owned 35% by Altria, will have a perfect partner for global expansion in Philip Morris.

Juul is funding in international growth at a time when it is facing escalating regulatory scrutiny regarding the health of company’s products across the United States.

Altria and Philip Morris International (PMI) are Marlboro cigarette makers, Altria sells cigarettes in the United States while PMI sells cigarettes across the rest of the world.

PMI also makes Virginia and Parliament brands, it also has its self-owned e-cigarette division which will replace traditional tobacco eventually, as stated on its website.

Analysts stated that the reason behind the collaboration was to face the decreasing cigarette sales, which dropped internationally by 4.5% last year. Altria has expanded in other fields along with tobacco in the recent years, acquiring stakes in cannabis, beer and wine companies, and even in Juul.

Recently, PMI got approval to sell IQOS, a heated tobacco product, in the United States. Unlike conventional cigarettes, sticks filled with tobacco are heated by the IQOS devices which then generate aerosol that has nicotine.

Any merger deals would require approvals by shareholders and regulators of both companies.

 

Source Credit: https://www.bbc.com/news/business-49477579