The European Commission announced on Tuesday that it had approved “subject to conditions” the acquisition by the tobacco giant Philip Morris International (PMI) of the Swedish Swedish Matchspecialist in nicotine sachets, for an amount of around 16,000 million euros.
To address the EU executive’s concerns, Philip Morris International has agreed to sell SMD Logistics, a subsidiary of Swedish Match, giving the latter a “de facto monopoly on the distribution of tobacco and nicotine products in Sweden,” it said. a communication from the Commission.
The Commission “concluded that the transaction, modified by the commitments” of PMI, “no longer raised competition concerns”, specifying that its decision was “conditional on full compliance with the commitments”. Brussels commits to “closely monitor the transfer procedure, in particular the choice of a suitable buyer for the transferred activity, which must be approved by the Commission.”
The acquisition of Swedish Match, a specialist in nicotine sachets and “snus”, the popular sucking tobacco in Sweden, is part of Philip Morris’s strategy to reduce the involvement of its activities in cigarettes, to offer less dangerous alternatives. PMI, which notably markets the Marlboro and Chesterfield brands outside the United States, announced on October 20 that it was raising its offer to 176.4 billion Swedish kronor, up from 161.2 billion in the first offer in May.
But with the appreciation of the greenback in recent months, it means for Philip Morris to spend less in dollars, as the offer goes from 16.16 to 15.76 billion dollars. Listed on the Stockholm Stock Exchange, Swedish Match generates nearly two-thirds of its turnover from the sale of smoke-free products. By joining forces with PMI, the company hopes “to have the possibility to expand distribution” of its products, Conny Karlsson, chairman of Swedish Match’s board, said in May.
Source: BFM TV
