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)