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Altria, Philip Morris consider reuniting for post-cigarette future

Tobacco may be on the verge of its biggest-ever deal, and it’s not about cigarettes, reports Bloomberg in Business Maverick. Rather, more than 10 years after splitting their operations, a deal could make sense as Altria and Philip Morris International reorient towards cannabis, vaping and heat-not-burn smoking technology.

The world’s two largest tobacco companies are in advanced talks about reuniting in a blockbuster deal that would be the largest since AT&T Inc’s bid for Time Warner in 2016, Bloomberg reports.

So why get back together after a 2008 divorce that came amid investor pressure on Altria, the maker of Marlboro cigarettes, to spin off its international business so the unit could focus on faster-growing overseas markets?

The world has changed a lot in that time and the companies have been on different paths.

Altria Chief Executive Officer Howard Willard, who took the reins in May 2018, has put his stamp on the company, spending almost $15 billion in recent months to acquire stakes in prominent vaping and cannabis companies. It was the latest attempt by the cigarette maker, which still holds a 10% stake in beer giant AB-Inbev, to push itself into faster-growing businesses.

Philip Morris, overseen by CEO Andre Calantzopoulos since 2013, has mostly been focused on IQOS, spending billions to develop the heat-not-burn smoking technology that was only recently approved for sale in the U.S.

Those divergent strategies are a big part of the reason why a potential acquisition makes sense for Philip Morris, according to Ken Shea, an analyst at Bloomberg Intelligence…

Full report on the Business Maverick site

[link url=""]Tobacco is on the verge of its biggest-ever deal, and it’s not about cigarettes.[/link]



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