Philip Morris not planning to drop Swedish Match’s $16 billion bid – CEO

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GDANSK/LONDON – Philip Morris is not considering withdrawing its bid for Swedish Match despite deteriorating global economic conditions and has « options on the table », including holding a majority stake, its CEO told Reuters .

Marlboro maker Philip Morris in May offered to buy the Stockholm-based company as part of a bet on the growing market for alternatives to cigarettes.

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According to Swedish law, 90% of Swedish Match shareholders must approve the offer by October 21, but some have spoken out against the $16 billion offer – or SEK 106 per share – for one of the biggest global manufacturers of oral nicotine products.

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Philip Morris CEO Jacek Olczak told Reuters he thought the offer was « even more attractive » now that the global macro environment has changed since the initial offer.

Asked if he had considered withdrawing the offer from Philip Morris, Olczak replied: « No – what I’m saying is that the offer that exists – the 106 SEK (per share) with 90% acceptance, etc. – is a good offer.”

He said becoming a majority shareholder of Swedish Match was one of many options if he did not cross the 90% threshold.

According to Euromonitor International, Swedish Match controls about half of the global market for snus, a moist, smokeless Swedish-style snuff. The company is also the world leader in the nicotine pouch industry.

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Earlier this month,

Elliott Investment Management said

that the stake it had built up in Swedish Match since the PMI offer had reached 5.25%, which made it one of its main shareholders.

The activist investor planned to oppose the offer on its current terms,

Bloomberg reported in July


Olczak said he regularly meets with investors from both companies, but declined to identify them.

« I’m just saying we talk to investors regularly, » he said.

He declined to say whether Philip Morris would increase his offer. (Reporting by Marie Mannes and Richa Naidu; Editing by Matt Scuffham)


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