Tag: Philip Morris International

PMI Acquires U.S. IQOS Rights From Altria

Photo: kalinichenkod
Philip Morris International will pay Altria Group approximately $2.7 billion for the exclusive U.S. commercialization rights to the IQOS tobacco-heating system effective April 20, 2024.
“We remain committed to creating long-term value through our vision,” said Altria CEO Billy Gifford in a statement. “We believe that this agreement provides us with fair compensation and greater flexibility to allocate resources toward ‘moving beyond smoking.’”
In 2013, Altria entered into a series of agreements with PMI related to innovative tobacco products, which included exclusive U.S. commercialization rights of Altria subsidiary Philip Morris USA to the IQOS system. PM USA’s commercialization rights were subject to an initial five-year term, which began when the system received authorization from the U.S. Food and Drug Administration in April 2019 and continued through April 2024.
As part of the 2013 agreement, PM USA had the right to maintain exclusive U.S. commercialization rights upon achieving an initial milestone by April 2022. Upon achieving additional milestones, PM USA had the option to renew for an additional five-year term through April 2029.
While Altria believed it achieved the required milestones, PMI disagreed. The parties were unable to reach a long-term agreement and decided to enter into the agreement to transition and ultimately conclude their relationship.
Altria received $1 billion from PMI upon entry into the agreement. Under the terms of the deal, PMI is obligated to make an additional payment of $1.7 billion (plus interest) by July 2023 for a total cash payment of approximately $2.7 billion (pre-tax). Altria expects to use the cash proceeds for several items, which may include investments in pursuit of its vision, debt repayment, share repurchases and general corporate purposes. Share repurchases, Altria said, depend on marketplace conditions and other factors and remain subject to the discretion of its board of directors.
Altria expects to record the $2.7 billion pre-tax transaction amount as a deferred gain on its consolidated balance sheet in the fourth quarter of 2022. This gain will be recognized in earnings when the company assigns its rights to the IQOS system.
IQOS and Marlboro HeatSticks are currently unavailable for sale in the U.S. due to orders imposed by the U.S. International Trade Commission that prohibit importation of IQOS and Marlboro HeatSticks into the U.S. relating to a patent dispute. PMI remains responsible for manufacturing the IQOS system and Marlboro HeatSticks and targets resumption of product supply in the first half of 2023. If supply of FDA-authorized product is available to Altria before May 2024, PM USA has the option to reintroduce the IQOS system and Marlboro HeatSticks for sale in the U.S. On April 30, 2024, U.S. commercialization rights to the IQOS system will transition to PMI. PMI will not have access to the Marlboro brand name or other brand assets, as PM USA owns the Marlboro trademark in the U.S.
In a press note announcing the IQOS transition, Altria said it remains committed to its vision to responsibly lead the transition of adult smokers to a smoke-free future. “We believe in a portfolio approach to tobacco harm reduction and expect to compete in the major smoke-free categories. We have reinvested into our internal product development system, and we expect to finalize designs for two smoke-free products, including a heated-tobacco product, by the end of 2022,” the company wrote.

“We are ready to invest behind IQOS to bring it to market at scale across the U.S., leveraging the proven capabilities of our outstanding commercial engine.”
Jacek Olczak, CEO, PMI
PMI, meanwhile, hailed the deal as a historic milestone in its journey toward a smoke-free future. “This agreement gives PMI full U.S. commercialization rights to IQOS within approximately 18 months and provides a clear path to fulfilling the product’s full potential in the world’s largest smoke-free market, leveraging PMI’s full strategic and financial commitment to IQOS’ success,” said PMI CEO Jacek Olczak in a statement. “The agreement also avoids what could have been an uncertain and protracted legal process that would have severely hindered the fast deployment of IQOS in the U.S.”
PMI views IQOS as a substantial growth opportunity in the U.S. smoke-free market, whose retail value represents around 60 percent of that for the rest of the world, excluding China. “The U.S. opportunity for IQOS is particularly significant given the clear demand from American adult smokers for credible smoke-free alternatives to cigarettes and the limited success to date of current offerings to fully switch adult smokers away from cigarettes. Furthermore, in the U.S., there are ample opportunities to build adult smoker awareness and understanding of smoke-free products, something that is particularly true for IQOS given its modified-risk tobacco product (MRTP) authorizations,” the company wrote in a press note.
“We are ready to invest behind IQOS to bring it to market at scale across the U.S., leveraging the proven capabilities of our outstanding commercial engine, which we will deploy domestically during the transition period to April 30, 2024,” said Olczak. “The route to market is clear given the well-established distribution and retail channels in the U.S., and we are well prepared to proceed autonomously to develop IQOS and the rest of our smoke-free portfolio should the offer for Swedish Match fail.”
PMI says it is already well advanced in its plans for the commercialization of IQOS in the U.S., as it prepares for domestic manufacturing, important regulatory submissions—including premarket tobacco product applications (PMTAs) for ILUMA in the second half of 2023—as well as the development of U.S. sales, distribution, retail, consumer engagement and support capabilities over the next 18 months.
“Our commercial plans include full-scale launches in key cities and regions with rapid progression to a national presence, and we believe that IQOS heat-not-burn products could account for around 10 percent of total U.S. cigarette and heated-tobacco unit volume by 2030,” said Olczak. “We estimate the industry profit pool for the U.S. at over $20 billion in 2021, underpinned by superior per-unit margin compared to PMI’s international market average. We see an accelerated path to profitability with an attractive payback period enhanced by the absence of a PMI domestic combustible tobacco business.”
Olczak said PMI looks forward to replicating its international success in switching adults who would otherwise continue to smoke to better alternatives. “According to 2022 U.S. Centers for Disease Control and Prevention (CDC) data, the U.S. is home to around 31 million adult smokers, and I believe that IQOS—the only inhalable smoke-free nicotine product to have received an MRTP authorization from the U.S. Food and Drug Administration and thus be recognized as appropriate for the [protection] of public health—can play a meaningful role in further reducing smoking rates,” he said.
October 20, 2022
PMI Reports 2022 Third-Quarter Results

Photo: Vitezslav Vylicil
Philip Morris International announced its 2022 third-quarter and September year-to-date results.
PMI reported a net revenue decline of 1.1 percent for the third quarter and an increase of 1.3 percent for the nine months year-to-date.
Net revenues from smoke-free products accounted for 30.1 percent of total net revenues, or 29.2 percent on a pro forma basis, for the third quarter. Market share for heated-tobacco units (HTUs) in IQOS markets were up by 1.3 points to 7.7 percent on a pro forma basis. Pro forma total IQOS users at quarter end were estimated at approximately 19.5 million (up by 3.6 million, or 22 percent, versus Sept. 30, 2021), of which approximately 13.5 million had switched to IQOS and stopped smoking. The company increased regular quarterly dividend by 1.6 percent to $1.27 per share, or an annualized rate of $5.08 per share.
For the nine months year-to-date, net revenues from smoke-free products accounted for 30.4 percent of total net revenues, or 29.6 percent on a pro forma basis. Market share for HTUs in IQOS markets was up by 1.2 points to 7.6 percent on a pro forma basis.
“We delivered very strong performance in the third quarter, driving quarterly adjusted diluted EPS of $1.53 per share despite pressures related to currency, the supply chain and inflation,” said PMI CEO Jacek Olczak in a statement.
“IQOS’ excellent momentum continued in the quarter, with heated-tobacco unit volume and share growth across all key geographies driven in part by ILUMA’s strong performance in initial launch markets. This was complemented by the robust performance of our combustible tobacco portfolio, reflecting essentially stable shipment volume, encouraging international market share growth and accelerated pricing.
“As a result of our strong year-to-date performance, we are raising the low end of our full-year pro forma growth outlook for adjusted net revenues, resulting in a range of 6.5 percent to 8 percent on an organic basis, and continue to expect full-year pro forma adjusted diluted EPS growth of 10 percent to 12 percent, excluding currency.”
October 20, 2022
PMI Extends Swedish Match Bid Deadline

Photo: xtock
Philip Morris Holland Holdings (PMHH) has extended the acceptance deadline of its $16 billion offer for Swedish Match to Nov. 4, 2022, as it awaits merger control approval from the European Commission.
In May, PMI offered to buy the Stockholm-based company to help accelerate its move to cigarette alternatives. Swedish Match is best known for its oral tobacco products, including snus and the Zyn tobacco-free nicotine pouches that have taken the U.S. market by storm.
The completion of the offer is conditional upon regulatory approvals. PMHH says it has already received the green light in the United States and Brazil but is still awaiting approval from the European Commission, which started its formal review on Sept. 6, 2022. PMHH decided to extend the deadline because it does not expect the Commission to complete its review until late October.
This is the second deadline extension. In early September, PMHH extended its initial Sept. 30 deadline to Oct. 11, based on its assessment of the European Commission’s progress with the review at the time.
According to PMHH, the other terms and conditions of its offer remain unchanged. “We believe our offer remains very compelling—particularly given the current market environment,” said Jacek Olczak, chief executive officer of Philip Morris International, in a statement. “We look forward to completing the transaction while also continuing to actively progress on our strategic alternatives to Swedish Match, should the offer ultimately prove unsuccessful.”
October 5, 2022
Survey Details Challenges to Progress

Gregoire Verdeaux (Photo: PMI)
Despite broad public support for disruptive innovation to address global challenges, issues such as lack of equal access are likely to stall progress, a new international survey released by Philip Morris International reveals. Commissioned by PMI and conducted by independent research agency Povaddo, the survey shows that 89 percent of adults across 14 countries believe that new technologies and innovations can play an important role in improving public health. However, 38 percent feel such innovations are not accessible to all citizens in their countries.
The more than 17,000 survey respondents aged 21 and older believe that the development and adoption of new technologies, innovations and capabilities can enable significant progress against a range of issues over the next 10 years to 20 years, including: encouraging healthier eating habits (78 percent); ensuring quality and affordable healthcare for all (72 percent); reducing smoking rates (65 percent); and eliminating hunger and malnourishment (62 percent).
“Disruptive innovation can drive progress for the world and achieve things few people imagined possible until recently,” said Gregoire Verdeaux, senior vice president of external affairs at PMI, in a statement. “But when the benefits of that disruption are not equally available to all, innovation fails to achieve its full potential. Pragmatic policy frameworks that anticipate innovations are needed so businesses and governments can ensure more equitable outcomes and a lasting impact for all.”
The international survey also highlights the potential of positive disruption in tobacco harm reduction—with 64 percent of respondents stating that new technologies and innovations can play an important role in helping replace cigarettes with less harmful alternatives for those adults who would otherwise continue to smoke.
“Today, with technological advances and scientific validation, we have an unprecedented opportunity to enact a major public health breakthrough—to effectively eradicate smoking faster,” added Verdeaux. “We can make this the tipping point at which millions of adult smokers are given accurate information about and access to innovative smoke-free products that are a much better choice than continued smoking. But for that to happen, all parties—businesses, governments, public health authorities—must work together.”
October 4, 2022
PMI Won’t Drop Swedish Match Bid: Olczak

Jacek Olczak (Photo: PMI)
Philip Morris International has no intention to drop its bid for Swedish Match, CEO Jacek Olczak told Reuters. In fact, he believes the $16 billion offer is “even more attractive” now given that the global macro-economic environment has changed since the original bid.
In May, PMI offered to buy the Stockholm-based company to help accelerate its move to cigarette alternatives. Swedish Match is best known for its oral tobacco products, including snus and the Zyn tobacco-free nicotine pouches that have taken the U.S. market by storm.
By Swedish law, 90 percent of Swedish Match shareholders need to approve the offer before Oct. 21, but some have come out against the $16 billion offer, saying it undervalues the company.
One of the holdouts, Elliot Management Corp., recently increased its stake in Swedish Match to 7.25 percent from 5.5 percent. The activist investor is believed to be planning to oppose the deal under its current terms. Elliott’s increased stake means the offer will fail if another 2.75 percent of shareholders take a similar view.
Shareholder Framtiden Partnerships, which owns 1 percent of Swedish Match also believes PMI’s offer is too low.
Olczak indicated that if fewer than 90 percent of Swedish Match shareholders approve the bid, PMI could simply become a majority shareholder. He said he regularly met with investors of both companies but declined to comment on whether PMI would increase its offer.
The acceptance period for the offer was initially set to expire on Sept. 30, 2022, but was later extended to Oct. 21, 2022, as the bid awaits approval from the European Commission.
October 4, 2022
PMI Argues Against IQOS Import Ban

Photo: librakv
The U.S. International Trade Commission (ITC) should have consulted more with the Food and Drug Administration before banning IQOS imports, lawyers for Philip Morris International argued before an appeals court panel on Oct. 3, according to Reuters.
In September 2021, the ITC upheld an initial determination from May 2021 that PMI’s IQOS device infringes on two patents owned by BAT subsidiary Reynolds American Inc. (RAI). The agency then instituted an import ban and a cease-and-desist order preventing IQOS consumables and devices from being sold in the U.S.
PMI has challenged the import ban in court, arguing among other things that the ban deprives American smokers of nicotine products that are less unhealthy than cigarettes.
The case is part of a global patent dispute between RAI’s parent company BAT and tobacco giant Altria Group, which separated from PMI in 2008 and is the exclusive distributor of IQOS in the United States.
A North Carolina jury awarded Altria $95 million last month on claims that RAI’s Vuse e-cigarettes infringed its patents. In a separate case over RAI’s Vuse line, PMI won more than $10 million from a Virginia jury.
RAI sued Philip Morris at the ITC in 2020. Its related patent case against PMI in Virginia is on hold.
In July 2020, the FDA granted IQOS modified-risk orders, allowing Altria and PMI to tell consumers that the product generates lower levels of harmful chemicals than traditional cigarettes, among other claims.
October 4, 2022
The Dilemma of Diversification

Login
While lambasted by anti-smoking activists, the tobacco industry’s move into pharmaceuticals may well turn out to be a positive for public health.
By Cheryl K. Olson
“The pharmaceuticalization of the tobacco industry.” This awkward phrase comes from a 2017 Annuals of Internal Medicine article referring to industry moves into noncombustible nicotine products. But recently, it’s gaining some literal truth. Legacy tobacco companies are stepping up diversification into pharmaceutical ventures.
Given that their current business direction is stalling, new adjacent opportunities that let tobacco companies use their specialized knowledge (say, of the tobacco plant genome or lung physiology or means of delivering substances) make sense. It may seem counterintuitive, or ethically iffy, for these companies to start offering solutions to problems they helped create. But they may frankly be well placed to do so because of their deep expertise. The criticisms of current industry moves into medical research and pharmaceuticals, such as Philip Morris International’s acquisition of Vectura and Fertin Pharma, seem more rooted in emotion than in practical concerns about effects on public health.
A Tour of Recent Criticisms of Diversification
Let’s review some recent criticisms and attempt to separate the moral from the practical. Take this September STAT+ article by Olivia Goldhill, titled “Tobacco Giant Philip Morris is Investing Billions in Health Care. Critics Say It’s Peddling Cures for Its Own Poison.”
The tone of the article makes ordinary business behavior sound sinister. Vectura Fertin Pharma, a firm combining two companies previously acquired by PMI, was “quietly incorporated.” PMI has been “racking up patents and taking over healthcare companies, an unlikely pivot that has accelerated dramatically in the past year.” PMI has also been “poaching considerable regulatory and pharma expertise.” All this in the article’s first two paragraphs.
The recent move by Matt Holman, who was director of the Office of Science at the Food and Drug Administration’s Center for Tobacco Products (Goldhill mislabels him as head of the CTP), to a position at PMI is described as a “move that shocked public health and tobacco researchers.” Why the surprise? Employees cycling from the FDA to the pharmaceutical companies they reviewed is commonplace; back in 2016, Time magazine called it “a revolving door.”
When PMI purchased Vectura, best known for making asthma medicine inhalers, the Reuters headline read, “Philip Morris seals deal for U.K.’s Vectura despite health group concerns.” The chief executive of Asthma U.K. and the British Lung Foundation stated, “There’s now a very real risk that Vectura’s deal with big tobacco will lead to the cigarette industry wielding undue influence on U.K. health policy.”
The U.S. reaction was similar. A joint statement by the presidents of the American Lung Association and American Thoracic Society called the acquisition a “reprehensible choice” by PMI. They were concerned that PMI might use Vectura’s inhalation technologies “to make their tobacco products more addictive.” They raised the prospect that PMI “could further profit from the disease their products have caused by now selling therapies to the same people who were sickened by smoking.”
The idea of cigarette companies profiting from conditions such as asthma and lung disease was reportedly also raised by British government officials, with the U.K. business minister asking for information on PMI’s plans for Vectura.
A deliberate company strategy to invest simultaneously in selling addictive poison and in peddling cures for that addiction would indeed be reprehensible. Is that what’s happening here? Or are tobacco companies making effortful attempts to find paths to replace the profits from cigarettes with profits from products that don’t harm and might improve public health?
Time will tell. PMI’s website states, “We are focused on our mission to one day stop selling cigarettes.” The Guardian newspaper’s coverage noted that while the Vectura acquisition was part of PMI’s smoke-free vision, “the company still makes about three-quarters of its $28 billion in annual revenue from ‘combustible’ products that involve the burning of tobacco.”
Critics of the tobacco industry didn’t always take such a dim view of moves away from cigarettes. A quick search in Google Scholar for “tobacco industry diversification” brought up this 1985 piece by Alan Blum in the New York State Journal of Medicine. He stated, “Some health professionals believe that criticism of tobacco companies for promoting cigarette smoking should be tempered because they have become conglomerates that are diversifying into nontobacco products and services. By encouraging such diversification, it is reasoned, health professionals can help expedite the phasing out of smoking while tobacco companies can have an opportunity to replace the resultant lost revenue.”
Blum’s concern was that this belief among “individuals working to eliminate smoking may be misguided.” This was not because those individuals saw industry diversification as a potentially positive step. Rather, he thought diversification wasn’t happening fast enough. Blum noted that tobacco companies were not decreasing investment in cigarette manufacturing and that “the percentage of total profit accounted for by tobacco sales is still the highest of all sources of revenue for tobacco companies.”
“Those It Employs [or] Funds Are Therefore Banned”
PMI’s announced acquisition of Vectura triggered efforts to exclude its employees and their research. The Drug Delivery to the Lungs conference terminated Vectura’s sponsorship. A Thorax editorial titled “Vectura and Philip Morris: The leopard has not changed its spots” stated that “The tobacco industry, those it employs and those it funds are therefore banned from membership of professional societies, including the British Thoracic Society (BTS).” The BTS would “exclude the tobacco industry as a legitimate partner in science and education,” including “publishing in respectable journals” and collaborations with universities. The editorial warns that “Vectura employees will need to consider their future.”
The treatment Vectura’s employees received is far from unique. Ian Fearon, director of whatIF? Consulting, has conducted research in a variety of settings and helps manufacturers write up their scientific data for publication. “The barriers to publication for tobacco companies and independent ENDS [electronic nicotine-delivery system] manufacturers are high, with many journals flatly refusing to even accept a paper to undergo peer review,” he said. “One major irony is the ‘we need the industry to be transparent’ phrase, yet the reality is that the number of journals willing to publish manufacturers’ data, despite its potential importance in assessing public health impacts, is small and diminishing.”
Fearon noted the criticism Juul received for “buying out” a 2021 special issue of the American Journal of Health Behavior to fully present their findings, which were a comprehensive examination of the potential impact of Juul on public health. Such publishing fees are common in academia; Juul even paid extra to make the articles free to all readers.
Derek Yach, formerly with the World Health Organization and the Foundation for a Smoke-Free World, equates the opposition based on the tobacco industry’s past bad practices to the 1980s U.S. boycott of Nestle. “That pushed NGOs [nongovernmental organizations] and WHO to vilify them for decades despite changes in their marketing way back,” he said. “To this day, in many public health leadership settings, Nestle is a real villain, regardless of all they have done to change. I suspect that playbook will apply here too.”
Yach sees the downside of diversification as less about ethics and public health and more about the practical difficulties. “It’s all about company focus and the inevitable clash of cultures—a pharma culture versus a tobacco company one, for example—and as a result, the ability to manage the transition.”
David Sweanor
Thinking About Diversification: A Conversation with David Sweanor
David Sweanor of the Centre for Health Law, Policy and Ethics at the University of Ottawa has long monitored tobacco company behavior.
Tobacco Reporter: Why are you interested in the issue of tobacco companies diversifying into things like pharmaceuticals?
Sweanor: My main interest is public health policy: How do you end up with a healthier population? Is this doing anything that’s going to create poorer health—in which case, there’d be a need to oppose it or try to regulate it in some way? Is it going to be neutral in terms of public health? Then, who cares who owns these companies?
If it’s something that could actually be good for public health, then we should be supporting it. And there’s reason to believe this could be the case. When companies have loads of resources to throw at something, and if this signals more of a move to transformation within the industry, it would be incredible for public health.
If they are working on [inhalation] technologies for lower risk alternatives to cigarettes, we have the potential for enormous breakthroughs. If we can get any of the major companies to really switch to being all-in on risk reduction, it would completely change the environment. The impact globally would be remarkable and happen very quickly.
If you want to get tobacco companies to switch to being in favor of transformation, the last thing you want to do is prevent them from doing things that would aid transformation. If you’re trying to get automobile companies to switch to electric cars, don’t prevent them from buying companies with battery technologies. You’re forcing them to continue to focus on internal combustion engines.
What do you see as valid and invalid criticisms of this diversification?
No valid ones immediately come to mind. If they were buying up technology that gave a far better alternative to cigarettes and then trying to kill that, then yeah.
It’s easy to talk about the invalid criticisms. A really good example of that is in Canada, where Medicago, based in Quebec City, developed a vaccine for Covid-19. In developing countries, this vaccine would work well because it doesn’t need to be stored at cold temperatures. Philip Morris has an indirect holding of about 30 percent in Medicago. Anti-tobacco groups attacked the government for approving the vaccine, and WHO refused to approve it.
What’s the thinking behind that? It’s saying: We don’t like this company because we think it’s done bad things in the past. To deal with this, we’ll prevent them from doing good things now. They created an epidemic of disease from smoking that became larger and lasted longer than it should have. So we’re going to prevent them from doing things that could reduce this epidemic of disease from Covid to make it last longer than it should.
Are people following the principles of the Enlightenment or the Inquisition? So much now with mainstream anti-tobacco groups is the latter. We don’t care about the quality of your work; we won’t give you a platform to discuss or debate it. That some affiliation you have is more important than the knowledge you bring is pretty reprehensible. It’s like saying Roman Catholics are not allowed to express their views.
What do you see as potential benefits to public health from this diversification? For example, Matt Holman’s new position as vice president of U.S. scientific engagement and regulatory strategy at PMI.
Look at the counterfactual. If they don’t do that, the only people working in cigarette companies working on transformation spent their careers working on and understanding and benefiting from cigarettes. If General Motors says, “we’re hiring engineers who understand electric mobility rather than hydrocarbons,” isn’t that a good thing? How can you transform if all the people in senior positions have their expertise in internal combustion engines?
We see this in high tech all the time; one company will buy another to get the expertise of their employees. You need them at the table when you make decisions on where to go with the next generation.–C.K.O
Addendum
In the main article above, I stated that the boycott of Nestle from the 1980s has had a lingering negative effect on WHO and many public health leaders’ views of the company many decades later. This despite Nestle being a global leader in addressing food insecurity, sustainable agriculture and the use of 21^st nutrition science (see the company’s 2021 annual report).
In the second half of October, Nestle’s past came back to haunt the company. The WHO Foundation, set up to build innovative private public partnerships, banned future Nestle contributions despite having originally accepted a grant for their work on addressing Covid-19.
The WHO Foundation already bans contributions from tobacco and arms manufacturers though it is unclear how “tobacco” is defined. Does it include governments with state monopolies? Does it include standalone e-cigarette, or nicotine pouch companies? Does it distinguish between companies where revenue from reduced risk products is increasing while combustible revenues are decreasing? Probably not.
Labelling companies as good or bad is the far easier option. But that option that ignores serious transformation and the opportunity to nudge and support the good emerging faster.
Derek Yach
Cheryl K. Olson is a California-based public health researcher who specializes in behavioral health issues and consults on tobacco product behaviors via McKinney Regulatory Science Advisors. She spent 15 years on the faculty of Harvard Medical School.

October 1, 2022
PMI to Make Heatsticks in the Philippines

Photo: PMI
Philip Morris International plans to invest an additional $150 million in its Philippine affiliate Philip Morris Fortune Tobacco Corp. (PMFTC) to add manufacturing lines that will produce specially designed heated-tobacco sticks for its smoke-free products, reports The Manila Times.
PMFTC’s cigarette manufacturing facility in Tanauan City, Batangas, will be expanded, with production beginning in the fourth quarter of 2023. The expansion is expected to generate 220 specialized jobs. PMFTC will use locally grown tobacco.
“We can say that we are proud to invest in the country’s journey to finally rid society of cigarettes by providing better alternatives to those who would otherwise continue to smoke while helping generate revenues for the government and livelihood opportunities for the people,” PMFTC President Denis Gorkun said.
In 2020, PMFTC launched PMI’s IQOS tobacco heating system in the Philippines. The company controls more than 90 percent of the local tobacco market.
September 30, 2022
Framtiden Opposes PMI Bid for Swedish Match

Photo: Swedish Match
Framtiden Management Co. announced its opposition to the proposed takeover of Swedish Match by Philip Morris International. The Framtiden Partnerships own over 14.5 million shares representing about 1 percent of outstanding shares.
As a long-term Swedish Match shareholder since 2003, Framtiden believes that the acquisition offer of SEK106 per share deeply undervalues the company, which Framtiden estimates to be worth nearly SEK200 per share.
The company detailed its position in a white paper.
According to Framtiden, the offer inadequately values Swedish Match’s leading position in the rapidly growing nicotine pouch segment and the latent market potential worldwide. Furthermore, the investors believe the offer underappreciates the uniqueness of a fast-growing established global consumer staples business and forces the realization of capital gains that would otherwise be deferred for long-term investors who want to participate in the company’s continued growth.
“My partner Chris Anderson and I believe that this deal does not make sense for long-term shareholders,” said Dan Juran, managing member of the Framtiden Partnerships, in a statement. “I have closely followed Swedish Match’s development for nearly two decades, built relationships with its managers and currently serve as the chairman of the company’s nominating committee. I was dismayed to see the board recommend the sale of this Swedish jewel at a bargain price in the early stage of probably the greatest chapter in its long history.
Juran said that while investors may be tempted by the short-term premium, especially during a period of market declines, he compared the potential of Swedish Match to that of Coca-Cola in the 1980s and Philip Morris in the 1950s.
“Those companies compounded earnings at a superior rate for many years, and shareholders who stuck with them were rewarded mightily,” he said. “We believe sticking with Swedish Match is likely to prove far more remunerative to shareholders over time than cashing out. We hope other shareholders see the merits of our position, further detailed in our white paper.”
Framtiden Management Co. joins Elliott Management Corp. and Bronte Capital in asserting that PMI’s offer undervalues Swedish Match. Elliott Management Corp. is believed to be increasing its stake in Swedish Match in order to get a better price from PMI.
PMI says it has already obtained approvals for its acquisition by regulators in Brazil and the United States. European regulators have indicated that they intend to review the bid by Oct. 11.
September 21, 2022
PMI Renews Call to Help End Smoking

Gregoire Verdeaux (Photo: PMI)
Philip Morris International is calling on policymakers, regulators, public health advocates, tobacco companies and activists to unite behind the goal of ending cigarette smoking.
As the United Nations General Assembly convenes to discuss global challenges, the company is releasing a white paper, “Rethinking Disruption: Innovating for Better in an Era of Division,” which previews select findings from a new international survey highlighting the broad societal support for disruptive innovations to improve public health and address other critical issues. The white paper explores how the world’s most significant challenges—including smoking—can be solved through pragmatic solutions and decisive, concerted action.
The survey respondents (17,207 adults aged 21 and older in 14 countries) believe that the development and adoption of new technologies, innovations and capabilities can enable significant progress against a range of issues over the next 10 years to 20 years, including: encouraging healthier eating habits (78 percent); ensuring quality and affordable healthcare for all (72 percent); reducing smoking rates (65 percent); and eliminating hunger and malnourishment (62 percent).
“We believe that there exists a real opportunity for activists, public health leaders and policymakers to significantly improve public health by helping millions of adults who would otherwise continue to smoke switch to better alternatives,” said Jacek Olczak, CEO of PMI. “For more than a decade, PMI has been transforming for good, directing our resources and energy to provide better options to adult smokers and deliver a smoke-free future as quickly as possible. Though the best choice is never to start smoking or to quit if you do, we know that, realistically, many smokers will not quit—and, frankly, those adults deserve better.”
Senior PMI executives, including Olczak, will address international forums during the week of Sept. 19, talking about the pressing need for collaboration on solutions that are real, practical and grounded in science to achieve meaningful progress in the tobacco sector and beyond.
“Innovation is a crucial piece of the solution of eliminating cigarettes, but it’s not the only piece,” said Gregoire Verdeaux, senior vice president of external affairs at PMI. “Once scientific and technological advances have been made, regulations need to keep up. Policies should reflect that certain tobacco and nicotine products are less harmful and ensure that adult smokers who do not quit can access and afford these better alternatives to cigarettes. This is especially true in developing countries, where most smokers are.”
A list of events can be found on the company’s website.
September 19, 2022