Philip Morris sweetens bid for Swedish Match

Philip Morris International said on Thursday that it has sweetened its offer for smokeless tobacco company Swedish Match.

The offer has been lifted to SEK 116 per share in cash from SEK 106 in May. This represents a premium of 52.5% to the closing share price on 9 May, which was the last trading day before market speculation of a potential offer.

The new bid values Swedish Match at around SEK 176.4bn.

PMI chief executive officer Jacek Olczak said: "We believe the best and final price in our revised offer for Swedish Match provides very compelling value for the shareholders of both Swedish Match and PMI.

"The price in the revised offer primarily reflects the higher net value to PMI related to the portion of Swedish Match’s cash flows that are generated in US dollars, given currency movements since the initial offer was announced in May. Moreover, we believe that the deterioration in the global economic outlook, equity markets and the interest rate environment since the time of the initial offer strengthens yet further the attractiveness of the revised offer to Swedish Match’s shareholders."

Olczak said that should the offer fail, PMI is "well prepared to proceed autonomously" to develop e-cigarettes IQOS and the rest of its smoke-free portfolio in the US.

On Wednesday, PMI agreed to buy the exclusive US rights for its IQQS heated tobacco products from Altria Group for $2.7bn.