Philip Morris International is moving forward with its $16 billion takeover of Swedish Match despite securing less than the 90 percent stake it sought, reports Reuters.
In a press note dated Nov. 7, PMI said it had secured 82.59 percent of the Swedish company, short of the 90 percent level at which it can start a compulsory purchase of the remaining shares.
This suggests that Elliott Management Corp., which had built a 10.5 percent stake in Swedish Match and opposed PMI’s offer, has tendered its shares.
PMI also announced it would further extend the acceptance period for remaining shareholders until Nov. 25, 2022, adding that the price in the offer for shares tendered during the further extended acceptance period will be reduced to SEK115.07 in cash per share.
“We are pleased that 82.59 percent of Swedish Match shareholders, including—we believe—the top 10 shareholders, have tendered their shares at the best and final price of SEK116 per share. This achievement of a high controlling stake should allow us to harness the strategic potential of the transaction, including anticipated revenue synergies,” said PMI CEO Jacek Olczak.
“We are today extending the acceptance period until Nov. 25 to allow those shareholders who have not tendered—including outstanding index funds—additional time to accept the offer while waiving the 90 percent acceptance condition to provide certainty to those shareholders who have already tendered. Our objective is to delist the shares of Swedish Match from the stock market after reaching an ownership of more than 90 percent. We, therefore, encourage the remaining retail and other institutional shareholders to tender in the extended time.
“We look forward to welcoming Swedish Match’s employees and leading oral nicotine portfolio into the PMI family to create a global smoke-free champion, notably bringing IQOS and ZYN together in both the U.S. and international markets. We will be working together to create value as we accelerate toward our shared vision of a smoke-free future.”
Mark Kelly, managing director of Cowen’s Event Driven Group, welcomed the acquisition.
“History will likely prove this as a successful transaction all around,” he said. “Swedish Match shareholders engineered a material improvement to the already healthy premium that Philip Morris had offered, and Philip Morris has now secured ownership of a world-class smokeless operation. Swedish Match will help PMI accelerate its goal of going 50 percent smokeless by 2025 and also brings it a U.S.-wide distribution network to facilitate its own rollout of IQOS heat-not-burn products going forward.”