logo
Share SHARE
FONT-SIZE Plus   Neg

Philip Morris To Buy Remaining 20% Stake In Mexican Unit For About $700 Mln

Tobacco giant Philip Morris International Inc. (PM) said Tuesday that it has agreed to buy the remaining 20 percent stake that it does not already own in its Mexican tobacco business from Grupo Carso, S.A.B. de C.V. for about $700 million. The deal, subject to the approval of the Mexican antitrust authority, is expected to be completed by September 30, 2013.

The company noted that the final purchase price of about $700 million for the Mexican tobacco business, Philip Morris Mexico S.A. de C.V. or PMM, will be determined by a pre-agreed formula. The purchase price is subject to a potential adjustment based on PMM's actual performance over three years ending two fiscal years after the closing of the purchase.

Philip Morris, the owner of Marlboro, Parliament and Virginia Slims cigarette brands, expects the acquisition to be immediately marginally accretive to its earnings per share as of the fourth quarter of 2013.

The company noted that its relationship with Grupo Carso as well as its founder and Mexican billionaire Carlos Slim Helú spans more than 30 years. Carlos Slim is a member of the board of directors of PMI.

Carlos Slim Helú, on behalf of Grupo Carso, said, "After more than 30 years of a very successful partnership of great harmony and cooperation that led PMM to continuous market share growth in the Mexican tobacco market, it is now time to leave PMM in the hands of one of the best management teams and organizations in the world, led by Louis C. Camilleri and André Calantzopoulos."

In 2012, Philip Morris held an estimated 16.3 percent share of the total international cigarette market outside of the U.S. The company's market share of Mexico's total tax-paid cigarette industry volume of 33.6 billion cigarettes in 2012 was 73.5 percent. PMI's flagship brand, Marlboro, is the leading brand in Mexico with a market share of 53.6 percent.

In late April, Philip Morris reported a 1.4 percent decline in its first-quarter profit, reflecting higher costs that offset an increase in revenues. However, earnings per share improved from last year. Cigarette shipment volume for the quarter declined 6.5 percent from the prior-year period.

In Tuesday's regular session, PM is trading at $94.00, down $1.00 or 1.05 percent on a volume of 1.38 million shares.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
HSBC is reportedly laying off about 100 of its senior investment bankers worldwide, as the banking giant strives to curb operating costs. According to reports, the London-headquartered bank will eliminate managing director and director level employees at the Global Banking and Markets division, as... Samsung Electronics Co., Ltd. (SMSN.L, SSNNF.OB, SSNLF.OB) will reportedly blame faulty batteries for last year's Galaxy Note 7 fiasco. According to a Wall Street Journal report, Samsung's investigation of Galaxy Note 7 smartphones found that some batteries were irregularly sized while others had... Federal investigators have closed their probe of a fatal crash that involved a Tesla Motors Inc. car eight months ago. The regulators said they have found no safety defects in the vehicle's automated driving system and that Tesla's Autopilot-enabled vehicles did not need to be recalled.
comments powered by Disqus
Follow RTT