Stockholm-based Swedish Match manufacturers smoke-free products including snus, chewing tobacco, and nicotine pouches. Credit: Swedish Match.
Philip Morris Holland Holdings B.V. (PMHH), an indirect wholly-owned subsidiary of Philip Morris International Inc. (PMI) offered US$16 billion to acquire Swedish Match as the company continues to move away from its traditional cigarette business. Swedish Match's board recommends the offer.
Under the terms of the offer, PMHH offers SEK106 per Swedish Match share in cash, which values the issued share capital of Swedish Match at approximately SEK161.2 billion (US$16 billion). The offer price represents a premium of approximately 39.4% compared to the closing share price of SEK76.06 on May 9, 2022 (the last day of trading prior to market speculation regarding a potential public offer for the company); 39.7% compared to the volume-weighted average trading price of SEK75.86 for the shares during the last 30 trading days ended on May 9; and 46.6% compared to the volume-weighted average trading price of SEK72.33 for the shares during the last 90 trading days ended on May 9.
Completion of the offer is conditional upon PMHH becoming the owner of more than 90% of the total number of shares in Swedish Match and the receipt of all necessary regulatory, governmental, or similar clearances, approvals, decisions, and other actions from authorities or similar, including from competition authorities, in each case on terms which, in PMHH's opinion, are acceptable. PMHH reserved the right to waive these and other conditions for completion of the offer. PMHH also reserved the right to extend the acceptance period and, to the extent necessary and permissible, will do so in order for the acceptance period to cover applicable decision-making procedures at relevant authorities. The acceptance period of the offer is expected to commence on or around June 23 and expire on or around September 30, subject to any extensions.
Under Swedish law, 90% of shareholders need to agree for the deal to go through. According to a Reuters report, hedge fund Bronte Capital, which owns about 1% of Swedish Match, found the offer price "unacceptable", reiterating its opposition to the takeover. John Hempton, Bronte Capital’s co-founder, said he had been contacted by many shareholders opposing the deal either because they found the offer to be too low or because they want the company to stay as it is.