JAKARTA. Philip Morris International Inc, the parent company of PT HM Sampoerna Tbk (HMSP), has confirmed that it is exploring a merger with Altria Group Inc, which would create a tobacco giant with a US$ 200 billion market cap.
If materialised, the merger would be the largest deal in the consumer business and the fourth-largest in history. The plan surfaced two years after British American Tobacco plc acquired Reynolds American Inc for US$ 49 billion. The declining global number of smokers has encouraged tobacco firms to seek resources in alternative product development.
A source informed Reuters that in the discussed provisions Altria’s shareholders will own 41%-42% of the combined company, with the rest owned by Philip Morris’s shareholders.
The board of the company will be evenly shared between Philip Morris’s and Altria’s director. The source added that an agreement could be reached by September if the deal negotiations turned out to be successful.
The source also said that Philip Morris and Altria viewed that their consolidated manufacture operations will result an annual synergy worth over US$ 800 million.
Source: IDN Financials | 29 August 2019