This past August 27, Altria Group announced that it is discussing an all-stock merger with Philip Morris International (PMI). If the merger goes through, it would create the world’s biggest tobacco group with approximately US$200 billion in sales.
Following a spin-off in 2008, Altria now operates in the US while PMI is in 180 other countries. Both companies have the same portfolio of cigarettes but divide sales between the US and the rest of the world, with Altria holding about 50% of the US market and PMI holing about 14% of the global market.
Negotiations are underway and an agreement could be reached by the end of this month. Under the new merger, Altria would control about 41-42% of the combined company, with PMI owning 58-59%. The board of the combined company is expected to be split evenly between PMI and Altria directors.