Swedish Match will hold an extraordinary general meeting on Jan. 16 in Stockholm following Philip Morris International’s takeover of the company.
Shareholders can register online.
The total number of shares and votes in Swedish Match at the time of notice to the general meeting amounts to 1,525,000,000, of which 4,285,810 shares are repurchased own shares, which may not be represented at the general meeting.
The entrance to the venue for the general meeting will open at 10:30 CET.
The board of Swedish Match said it will apply for delisting of the company’s shares from Nasdaq Stockholm, according to a press release. The last day of trading in the company’s shares on Nasdaq Stockholm will be announced as soon as the company has received confirmation from the exchange.
Philip Morris Holland Holdings, an affiliate of Philip Morris International, declared the public offer for Swedish Match unconditional on Nov. 7, 2022. PMHH controls more than 90 percent of the shares in Swedish Match and has initiated squeeze-out proceedings in respect of the remaining shares in the company.
Framtiden Management Co. has tendered its Swedish Match shares to Philip Morris International despite reservations about the takeover.
“As a Swedish Match shareholder since 2003, I believe that this deal does not make sense for long-term shareholders,” said the Framtiden Partnerships managing member Dan Juran in a statement. “Through a press release and white paper, my partner Chris Anderson and I shared our view in the hope other shareholders would see the merits of our position. Philip Morris has since acquired nearly 86 percent of shares.
“Failing our preferred outcome, an independent public company, our intention was to continue on the Swedish Match journey as a minority shareholder of a majority-owned public company. Unfortunately, during the current offer ending Nov. 25, or soon thereafter, we believe the odds are high Philip Morris will attain the 90 percent threshold necessary to delist the shares and commence a compulsory offer. Given a likely choice between tendering now or owning private shares for a short period before a compulsory offer, we have regretfully tendered our shares.”
In May, PMI bid about $16 billion for Swedish Match. Swedish Match’s board of directors recommended shareholders accept the offer, but some investors, including Elliott Management Corp. and Framtiden, objected, saying the bid undervalues their firm.
In October, PMI increased the price of its bid to SEK116 per share from the SEK106 per share offered in May. Swedish Match’s board of directors advised shareholders to accept PMI’s revised offer.
Elliot Management Corp. then accepted the sweetened bid, contributing to PMI’s 86 percent shareholding.
Under Swedish law, PMI needs 90 percent of shareholders to agree to the deal in order to get full control over the company.
The Framtiden Partnerships owned over 14.5 million Swedish Match shares, representing about 1 percent of outstanding shares.
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 look forward to welcoming Swedish Match’s employees and leading oral nicotine portfolio into the PMI family to create a global smoke-free champion.”
“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.”
Elliott Management Corp. has decided to back Philip Morris International’s bid for Swedish Match, reports the Financial Times.
By the Nov. 4 acceptance deadline, the multinational’s offer had received more than 80 percent shareholder acceptance.
In May, PMI bid about $16 billion for Swedish Match. Swedish Match’s board of directors recommended shareholders accept the offer, but some investors, including Elliott Management Corp., objected, saying the bid undervalues their firm.
In October, PMI increased the price of its bid to SEK116 per share from the SEK106 per share offered in May. Swedish Match’s board of directors advised shareholders to accept PMI’s revised offer.
Earlier this week, Framtiden Partnerships said it would not accept PMI’s sweetened offer, according to Reuters.
In a white paper, the investor, which owns nearly 1 percent of the Swedish nicotine products manufacturer, explained it believes Swedish Match is better off as an independent company.
PMI’s bid has won approval from regulators in the EU, Brazil and the United States.
Shareholders of Swedish Match must decide today whether to tender their shares to Philip Morris International.
In May, PMI bid about $16 billion for Swedish Match. Swedish Match’s board of directors recommended shareholders accept the offer, but some investors, including Elliott Management Corp., objected, saying the bid undervalues their firm.
In October, PMI increased the price of its bid to SEK116 per share from the SEK106 per share offered in May. Swedish Match’s board of directors advised shareholders to accept PMI’s revised offer.
Under Swedish law, PMI needs 90 percent of shareholders to agree to the deal in order to get full control over the company.
Earlier this week, Framtiden Partnerships said it would not accept PMI’s sweetened offer, according to Reuters.
The investor, which owns nearly 1 percent of the Swedish nicotine products manufacturer, believes Swedish Match is better off as an independent company. Framtiden managing member Dan Juran estimates Swedish Match to be worth close to SEK200 per share.
Framtiden said it would urge Swedish Match management to initiate a share buyback and potentially a special dividend if the deal does not go through.
“As we wrote in our white paper, there is incredible long-term value in this asset, but we also think that there is great value to be realized in the short term as well,” Chris Anderson, a partner in Framtiden, was quoted as saying by Reuters, adding that a planned U.S. cigar business spinoff will also provide additional shareholder value.
On Oct. 28, Elliott Management Corp. raised its stake in Swedish Match to over 10 percent—enough to scupper the deal if it opposed the bid.
Elliott Management Corp. raised its stake in Swedish Match to over 10 percent on Oct. 28. The move came one week before the Nov. 4 deadline when shareholders must decide whether to accept Philip Morris International’s takeover bid for the Swedish company.
In May, PMI bid about $16 billion for Swedish Match. Swedish Match’s board of directors recommended shareholders accept the offer, but some investors, including Elliott Management Corp., objected, saying the bid undervalues their firm.
Earlier this month, PMI increased the price of its bid to SEK116 ($10.34) per share from the SEK106 per share offered in May. Swedish Match’s board of directors advised shareholders to accept PMI’s revised offer.
Under Swedish law, PMI needs 90 percent of shareholders to agree to the deal in order to get full control over the company.
By increasing its stake to 10.5 percent from 7.25 percent previously, Elliott could scupper the deal if it rejects the offer. When it announced its sweetened bid, PMI indicated it would not further increase the price of its revised offer.
PMI also has the option to reduce the acceptance threshold and take a majority stake in order to prevent the bid from failing.
Speaking to Reuters before Elliott disclosed the higher stake, Swedish Match CEO Lars Dahlgren said that he believed the company could thrive by itself or together with Philip Morris.
“I believe we have exciting prospects as a standalone company, but I see exciting opportunities with a potential combination,” he said.
Swedish Match’s board of directors has advised shareholders to accept Philip Morris International’s revised offer for the company.
In May, PMI bid about $16 billion for Swedish Match. Swedish Match’s board of directors recommended shareholders accept the offer, but some investors, including Elliott Management Corp., objected, saying the bid undervalues their firm.
Earlier this month, PMI increased the price of its bid to SEK116 ($10.34) per share from the SEK106 per share offered in May.
The offer represents a premium of 52.5 percent 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), a premium of 52.9 percent 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 a premium of 60.4 percent compared to the volume-weighted average trading price of SEK72.33 for the shares during the last 90 trading days ended on May 9.
The resolution to support PMI’s revised offer was supported by all Swedish Match board members except Pär-Ola Olausson, who believes that Swedish Match has the competence and the experience to remain independent in the long-term and that the terms of the revised offer do not reflect the long-term fundamental value of the company, according to a company statement.
The acceptance deadline for PMI’s offer is Nov. 4, 2022.
The European Commission has approved the proposed acquisition of Swedish Match by Philip Morris International.
In a statement on its website, the Commission noted that Swedish Match holds a de facto monopoly on distribution of tobacco and nicotine products in Sweden through its subsidiary SMD Logistics.
The Commission’s preliminary investigation showed that SMD Logistics has a dominant position in the supply of combustible tobacco, smoke-free and related products in Sweden.
The Commission found that the transaction could have led to foreclosure effects in Sweden, given that SMD is the only distributor of combustible tobacco, smoke-free and related products in Sweden. It did not find competition concerns in other markets in which the parties compete, including the manufacture and supply of snus in Sweden and Norway and of nicotine pouches in Sweden and Slovenia, as sufficient alternative suppliers would remain active following the transaction.
To address the Commission’s preliminary competition concerns, PMI offered to divest Swedish Match’s logistics arm, SMD Logistics.
The commitments consist of the structural divestiture of a stand-alone business, which fully removes the vertical links between the manufacture of tobacco and nicotine products and their distribution in Sweden. This will enable a purchaser to run the divested business as a viable competitive force in the market on a lasting basis.
The Commission said it will closely monitor the divestment process, including the choice of a suitable purchaser for the divested business that will have to be approved by the Commission.
Following the market test, the Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns.
Earlier, PMI’s proposed acquisition received a green light from authorities in the United States and Brazil.
“We are pleased to have received all necessary regulatory approvals and believe the best and final price in our revised offer for Swedish Match provides very compelling value for the shareholders of both Swedish Match and PMI,” said PMI CEO Jacek Olczak in a statement.
“The revised offer retains a 90 percent acceptance condition, which is critical to capture the full potential of the combination. Should the offer fail, we are well prepared to proceed autonomously to develop IQOS and the rest of our smoke-free portfolio in the U.S.”
Philip Morris Holland Holdings (PMH), an affiliate of Philip Morris International has increased the price of its bid for Swedish Match to SEK116 ($10.34) per share from the SEK106 per share offered in May. The company announced it would not further increase the price in its revised offer.
According to PMI, the new price offered represents a premium of 52.5 percent compared to Swedish Match’s closing share price of SEK76.06 on May 9, 2022; 52.9 percent compared to the volume-weighted average trading price of SEK75.86 during the 30 trading days ending May 9, 2022; and 60.4 percent compared to the volume-weighted average trading price of SEK72.33 during the 90 trading days ending May 9, 2022.
“We believe the best and final price in our revised offer for Swedish Match provides very compelling value for the shareholders of both Swedish Match and PMI,” said PMI CEO Jacek Olczak in a statement.
“The price in the revised offer primarily reflects the higher net value to PMI related to the portion of Swedish Match’s cash flows that are generated in U.S. dollars, given currency movements since the initial offer was announced in May.
“Moreover, we believe that the deterioration in the global economic outlook, equity markets and the interest rate environment since the time of the initial offer strengthens yet further the attractiveness of the revised offer to Swedish Match’s shareholders. The revised offer retains a 90 percent acceptance condition, which is critical to capture the full potential of the combination. Should the offer fail, we are well prepared to proceed autonomously to develop IQOS and the rest of our smoke-free portfolio in the U.S.”
“The price in the revised offer primarily reflects the higher net value to PMI related to the portion of Swedish Match’s cash flows that are generated in U.S. dollars.”
In May, PMI bid about $16 billion for Swedish Match, which is best known for its smokeless products, including the successful Zyn nicotine pouches that have been taking the U.S. market by storm. Swedish Match’s board of directors recommended shareholders accept the offer, but some investors, including Elliott Management Corp., object, saying the bid undervalues their firm.
Raising the offer is made easier for PMI by the gains of the U.S. dollar against the Swedish currency since the deal was struck. Other factors that went into the revised offer were inflation, volatility in equity markets and changes in interest rates, according to a source at The Wall Street Journal.
In related news, PMI has struck a deal with Altria to buy back the U.S. commercialization rights for IQOS, Philip Morris’ heated-tobacco device.
IQOS and the proposal to buy Swedish Match are part of PMI’s strategy to generate more than half of its annual net revenue from smoke-free products by 2025, up from about 30 percent currently.