HENRICO COUNTY (dpa-AFX) - Tobacco giants Philip Morris International Inc. (PM) and Altria Group Inc. (MO) Tuesday announced that they are in discussions regarding a potential all-stock, merger of equals, nearly a decade after splitting.
Both the companies confirmed that they're discussing a potential all-stock merger. However, they also warned that there's no assurance they will reach an agreement from their ongoing discussions. Any transaction would be subject to the approval of the two companies' boards and shareholders, and regulators, as well as other conditions.
Altria spun off Philip Morris in 2008. After the separation, Altria focussed on the U.S. market while, Philip Morris turned its attention on the international tobacco business. Both companies share several popular cigarette brands, like Marlboro, which Altria sells in the US market while Philip Morris supplies internationally.
However, both companies have been struggling with declining sales as anti-tobacco health campaigns and healthier lifestyle have impacted sales of cigarettes. Younger generation now prefer e-cigarettes sold by companies including Juul. Altria acquired a 35% stake in Juul last year for $12.8 billion.
PM closed Tuesday's trading at $71.70, down $6.03 or 7.76%, on the NYSE, while MO closed trading at $45.25, down $1.87 or 3.97%.
Copyright RTT News/dpa-AFX
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