Philip Morris’ affiliate to spend $16 billion in a public offer

Philip Morris International Inc.’s (NYSE: PM) affiliate Philip Morris International Holdings B.V. (“PMHH”), has announced a recommended public offering to Swedish Match AB shareholders to tender their holdings in Swedish Match to PMHH at SEK 106 per share in cash. Swedish Match shares currently trade on Nasdaq Stockholm, Large Cap.

Philip Morris to pay $16 billion for Swedish Match shares

CEO of Philip Morris Jacek Olczak said:

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We are pleased to announce this exciting next step in Philip Morris International’s and Swedish Match’s trajectory toward a smoke-free future. Underpinned by compelling strategic and financial rationale, this combination would create a global smoke-free champion—strengthened by complementary geographic footprints, commercial capabilities and product portfolios—and open up significant platforms for growth in the U.S. and internationally.

According to the terms of the Offer, Swedish Match shareholders were given SEK 106 for each share held for a total consideration of SEK 161.2 billion ($16 billion).

The Offer price per share represents a 39.4% premium over the closing stock price of SEK 76.06 on Monday, May 9, 2022, and a 39.7% premium over the volume-weighted average share price of SEK 75.86 for the 30 days ending May 9, 2022. Also, the price reflects a 46.6% premium over the volume-weighted average price of SEK 72.33 over the past 90 trading days ending on May 9, 2022.

Swedish Match’s board of directors recommended that their stockholders accept the Offer. A fairness review from SEB Corporate Finance, Skandinaviska Enskilda Banken AB (publ), backs up the proposal. The company will make an offer document about the transaction on June 22, 2022. 

PMHH to own 90% of Swedish Match after completion of the Offer

The Offer’s acceptance window is projected to begin on or about June 23, 2022, and end on or about September 30, 2022. Once the offer closes, PMHH  will own around 90% of the total and outstanding Swedish Match shares

Olczak added:

Swedish Match’s dedicated employees and management have steadfastly pursued the company’s vision of a world without cigarettes, while delivering very strong results. We look forward to building upon this success and joining forces to accelerate our shared smoke-free mission.