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Philip Morris bids $16 billion for Swedish Match in quest for that you just would possibly possibly possibly well possibly imagine alternate choices to cigarettes

Marlboro-maker Philip Morris Worldwide Inc (PMI) said on Wednesday it became making a suggested money provide to get tobacco and nicotine merchandise maker Swedish Match for 106 Swedish crowns per half.

It said the provide price for the Stockholm-listed company amounted to about 161.2 billion Swedish crowns ($16 billion).

Swedish Match shares hit a file high on Tuesday after PMI confirmed reports it became in talks to get the Swedish agency, making a bet on the snappy-increasing marketplace for cigarette that you just would possibly possibly possibly well possibly imagine alternate choices. Swedish Match shares rose a extra 9% on Wednesday at 103.50 crowns.

The Swedish company makes most of its money in on Swedish-style snuff known as “snus”, nonetheless gross sales of its Zyn tobacco-free nicotine pouches are increasing without be aware in Scandinavia and the United States as patrons became more health-aware.

PMI became spun off from U.S. deem about Altria in 2008.

Buying Swedish Match would give PMI, which is U.S.-primarily based completely nonetheless would no longer promote its merchandise within the US, bring together entry to to a willing-made distribution network, taking on its ragged owners in its dwelling market.

Swedish Match, which reported first-quarter earnings on Wednesday that were merely below market expectations, said gross sales and earnings from Zyn grew greatly within the US, with deliveries up 35%.

The Swedish Match board said in a assertion it believed “the terms of the provide recognise Swedish Match’s lengthy-time duration enhance prospects, taking into myth the dangers connected with the realisation of those prospects”.

The resolution became supported by all board participants attach one, a book of replace union IF Metall, who said Swedish Match had the competence and abilities to live honest and that the provide did no longer ponder its lengthy-time duration elementary price.

Analysts at Credit Suisse said they had a certain gape on the present level, asserting it represented a roughly 40% premium to its previously undisturbed mark.

PMI said ending the provide became conditional on regulatory approval and on no other company making an provide that became more favourable to Swedish Match’s shareholders.

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