Breaking News
FONT-SIZE Plus   Neg
Share SHARE

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

Tobacco giant Philip Morris International Inc. (PM: Quote) 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.

Register
To receive FREE breaking news email alerts for Philip Morris International and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
LinkedIn Corp., the world's largest online professional network, said Thursday after the markets closed that its third quarter loss widened slightly from last year, as higher costs and expenses more than offset a 45% increase in revenue. However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly revenue. After ending the previous session modestly lower, stocks moved mostly higher over the course of the trading day on Thursday. The gains on the day more than offset yesterday's losses, lifting the major averages to their best closing levels in a month. Sen. Lindsey Graham, R-S.C., is seen as a long shot for the Republican presidential nomination in 2016, and his chances may have gotten worse after he was recorded joking about the prospects for "white men" if he were elected president.
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.