Investing.com – The companies behind the world's most famous cigarette brand want to reunite.
Philip Morris International (NYSE 🙂 and Altria (NYSE 🙂 have announced on Tuesday that they will participate in talks to execute a contract all-stock merger, a transaction involving a company with a value of more than 200 billion 11 years after the breakup to protect shareholders from potentially ruinous litigation in the US.
Altria's shares jumped over 8% in early trading Philip Morris fell 5.5%, reflecting Altria's focus on the US still trading at a significant discount to its international half. At the close on Monday, Altria had a value of $ 80 billion and a purchasing manager index of $ 1
In a press release, the two companies referred to the deal as a "merger of peers," implying that shareholders of Altria could be fined one dollar of fortune. However, they warned that a deal was not secure:
"There can be no assurance that any such discussions will result in an agreement or transaction," the press release said. "In addition, there can be no guarantee that a transaction will be completed when an agreement is reached."
A deal would also require the approval of the board of directors and shareholders as well as the regulators of the company.
The move comes at a time when both companies are struggling with declining sales of their traditional products, cigarettes and a profound change in their habits among a new generation of health-conscious consumers.
Altria in particular has attempted to solve this strategic dilemma by investing in the steam company Juul Labs, in which it now owns 35% of the shares, and an investment of $ 1.8 billion in the Canadian cannabis group  Cronos (NASDAQ :).
On Monday Wells Fargo (NYSE 🙂 Analyst Bonnie Herzog said Philip Morris would be the ideal partner to expand Juul Lab's overseas presence, according to Reuters.
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