Philip Morris continues $16 billion takeover of Swedish Match and takes 83% stake

Marlboro manufacturer Philip Morris International (PMI) announced today that it is pursuing its plan to buy Swedish Match for $16 billion, despite having received approval from owners holding no more than 82.59%.

According to Swedish law, a bidder can only initiate a forced buyback of the remaining shares if the voluntary acceptance exceeds 90%. PMI has previously said it may withdraw the offer if the number of accepted offers is lower.

“This achievement of a high controlling stake should allow us to harness the strategic potential of the transaction, including anticipated revenue synergies,” said PMI Chief Executive Jacek Olczak.

In the spring, PMI made an offer to buy Swedish Match for 106 kr per share, valuing the company at $16 billion. In October, he raised it to 116 kr per share after some investors said it was too low.

“We look forward to welcoming Swedish Match’s employees and leading oral nicotine portfolio into the PMI family,” the U.S. firm said.

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According to PMI, the ten significant shareholders of the Swedish group have accepted its offer, and the offer to buy shares will be extended until November 25 in the hope of further increasing their stake.

PMI’s goal is to delist Swedish Match shares once they exceed 90% ownership, so they are calling on the remaining retail and other institutional shareholders to bid in the allotted time.

Swedish Match and its distribution network in the US will give Philip Morris a foothold in the largest market for alternative smoking products, including vaping devices, nicotine pouches, and heated tobacco. The biggest players in the industry are vying for positions, and taking a number of steps to gain market share.

The successful takeover will accelerate international cigarette maker Marlboro’s goal of generating 50% of its revenue from alternative smoking products by 2025.