Daily Management Review

Philip Morris is discussing merger with Altria Group


After a long separation, the American tobacco giants Philip Morris and Altria Group pondering a merger. Representatives of companies spoke about a possible reunion.

Philip Morris is discussing merger with Altria Group
The details of the deal have not been disclosed, but analysts estimate that Philip Morris shareholders will receive approximately 59% of the new business, and Altria investors will get the rest. At the same time, the total capitalization the nicotine giant will exceed $ 210 billion.

The original Philip Morris company was split in 2008. Now, according to experts, the merger will help strengthen their market positions against the background of the transformation of the tobacco industry and the development of alternative smoking methods.

In particular, Altria and Philip Morris have managed to assemble a portfolio of various innovative products and investments in related sectors, such as Canadian cannabis companies.

However, traders are not as optimistic as management. The market instantly reacted to the news of the merger with a significant decrease in the stock price of both companies. Thus, Philip Morris stocks fell by more than 7.5% during trading, and Altria shares, after a short growth, also fell by almost 4%.

In addition, exchange analysts noticed unusual activity during the trading of Altria stock options. Unknown businessmen earned nearly $ 8 million in buying contracts literally a few hours before the merger was announced.

source: reuters.com