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Packages of Marlboro cigarettes on display for sale in Port-au-Prince, Haiti, May 29 2019. Picture: ANDRES MARTINEZ CASARES/REUTERS
Packages of Marlboro cigarettes on display for sale in Port-au-Prince, Haiti, May 29 2019. Picture: ANDRES MARTINEZ CASARES/REUTERS

Philip Morris International is in talks to buy rival Swedish Match, the companies said on Monday, as the Marlboro maker looks to expand its smoke-free options amid rising global scrutiny on the sale of traditional cigarettes.

The talks between the companies were in progress, but it was uncertain whether an offer will be made, Philip Morris said in a separate statement. Shares of the company were up 1.6% at $100.53. The deal could be valued at about $15bn or more, reports said. 

Swedish Match had a market capitalisation of 120.92-billion Swedish krona ($12.04bn), as of last close, according to Refinitiv data. Philip Morris had a market capitalisation of $153.37bn.

Last year, Philip Morris bought asthma inhaler maker Vectura for $1.44bn as part of its long-term plan to develop smoke-free products and switch to being a “broader healthcare and wellness” company.

The US Food and Drug Administration in April issued a long-awaited proposal to ban flavoured cigars and menthol cigarettes, which account for more than a third of the industry’s overall market share in the US.

Swedish Match makes snus, a wet snuff product that is banned in all EU countries except Sweden. The company has grown in the US cigar market in recent years and hopes for similar success there with snus, which faces competition in its home market.

The talks between the Marlboro maker and Swedish Match could yield a deal as soon as this week, the Wall Street Journal first reported the news earlier on Monday, citing people familiar with the matter.

Swedish Match in March shelved plans to spin off and list its US cigar business.

Reuters  

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