Tag: Swedish Match

Swedish Match Accepts PMI’s $16 Billion Offer

Photo: Swedish Match
Swedish Match’s board of directors has accepted Philip Morris International’s offer of SEK161.2 billion ($16.14 billion), according to The Wall Street Journal. The deal is subject to shareholder approval.
PMI hosted a live audio webcast today to discuss the offer. An archived copy of the webcast will be available at www.pmi.com/investors until 5 p.m. ET on June 9, 2022.
“We are pleased to announce this exciting next step in Philip Morris International’s and Swedish Match’s trajectory toward a smoke-free future,” said PMI CEO Jacek Olczak in a statement. “Underpinned by compelling strategic and financial rationale, this combination would create a global smoke-free champion—strengthened by complementary geographic footprints, commercial capabilities and product portfolios—and open up significant platforms for growth in the U.S. and internationally.
“Swedish Match’s dedicated employees and management have steadfastly pursued the company’s vision of a world without cigarettes while delivering very strong results. We look forward to building upon this success and joining forces to accelerate our shared smoke-free mission.”
In 2016, PMI announced its new mission to replace cigarettes with science-based, less harmful alternatives as soon as possible, and the company says it has made considerable progress toward that goal. While in 2015, essentially all of PMI’s net revenues came from cigarettes, last year nearly 30 percent came from smoke-free products. By 2025, PMI aims to be a predominantly smoke-free company, with more than half of its net revenues coming from such products. PMI says it has built world-class scientific assessment capabilities, notably in the areas of preclinical systems toxicology, clinical and behavioral research as well as postmarket studies.

Underpinned by compelling strategic and financial rationale, this combination would create a global smoke-free champion.
Jacek Olczak , CEO, PMI
Swedish Match embarked on its smoke-free journey two decades ago, starting with its decision to divest its cigarette business. PMI says it values how Swedish Match has relentlessly pursued tobacco harm reduction through its range of smoke-free products; received authorizations for its products via strict regulatory pathways in the U.S.; and reshaped the public health environment in countries such as Sweden and Norway.
“As PMI continues to evolve its business for the long term, it believes that the two companies would be a perfect pairing of strategic vision, culture and enterprise,” PMI wrote in a press note. “Together, the companies would be able to create a global, science-led smoke-free champion, combining expertise in heated tobacco and oral nicotine—including multiple MRTP [modified-risk tobacco product] authorizations—as well as PMI’s emerging presence in e-vapor products, to switch more adult smokers to better alternatives than the two could achieve as separate companies. Swedish Match would lead the combined company’s oral nicotine business.”
Financial analysts confirmed the deal has strategic merit, citing Swedish Match’s access to the lucrative U.S. market. Cigarette sales have been declining almost unabated for years because of the health hazards and the stigma attached to smoking. Meanwhile, “modern oral” products, such as nicotine pouches and lozenges, are driving growth in the oral tobacco category, which includes traditional chewing tobacco and moist snuff. Swedish Match’s Zyn pouch leads the U.S. modern oral category with a volume market share of 64 percent in 2021.
According to PMI, the combination would immediately enhance PMI’s already strong growth profile and support additional opportunities in the U.S. and internationally over time. It is also expected to be accretive to adjusted diluted earnings per share before any synergies and excluding transaction-related costs as well as the amortization of acquired intangibles. Swedish Match’s operating cash flow comprises meaningful U.S. dollar net income, thereby improving PMI’s currency profile.
From January through March 2022, Swedish Match’s sales and operating profit from product segments increased on the back of continued strong momentum for the U.S. smoke-free business, according to the company’s interim report.
Group sales increased by 10 percent to SEK4.89 billion ($492.05 million). In local currencies, sales increased by 2 percent for the first quarter.
Operating profit from product segments increased to SEK2.12 billion. In local currencies, operating profit from product segments decreased by 7 percent for the first quarter.
Profit after tax amounted to SEK1.49 billion.
PMI says it intends to preserve and develop Swedish Match’s operational presence in Sweden, where much of the company’s skills base is located, as well as in Richmond, Virginia, the site of the head office for Swedish Match’s U.S. Division. PMI has no plans to divest Swedish Match’s Lights business.
May 11, 2022
PMI Mulls Offer for Swedish Match

Photo: SecondSide
Philip Morris International and Swedish Match confirmed that they are talking about a possible offer by PMI for Swedish Match.
“The discussions are in progress, and it is uncertain whether an offer will be made,” PMI wrote in a statement. “PMI intends to make no further comment regarding the discussions unless and until it is appropriate to do so.”
“There can be no certainty that an offer will be made,” Swedish Match wrote in a press note.
The statements were made in response to market speculation, first reported in The Wall Street Journal, about a possible deal.
Swedish Match has a market capitalization of SKR120.92 billion ($11.99 billion), and Philip Morris is valued at about $154 billion.
Financial analysts said a deal has strategic merit for PMI given the attractive U.S. market. The U.S. is the world’s most lucrative nicotine market, with strong and highly predictable cash flows.
Morgan Stanley said that purchasing Swedish Match could accelerate PMI’s smoke-free transition. “Swedish Match is one of the few larger scale tobacco assets with a meaningful smoke-free business and attractive growth profile,” the investment bank wrote in a note to investors. Morgan Stanley believes Swedish Match could increase PMI’s smoke-free revenue from 29 percent in 2021 to 44 percent by 2025.
PMI aims to generate about 50 percent of its revenue from smoke-free product by 2025.

Purchasing Swedish Match could accelerate PMI’s smoke-free transition. (Photo: Swedish Match)
Goldman Sachs, too, was enthusiastic about the opportunities presented by a possible tie-up. A deal would provide PMI access to the fast-growing and high-margin U.S. oral nicotine pouch category, in which Swedish Match’s Zyn is the market leader, with a volume share of 64 percent in fiscal 2021. Goldman Sachs expects the U.S. nicotine pouch category to reach $4 billion retail sales value by 2025.
What’s more, buying Swedish Match would provide PMI with a platform to bring its Veev vapor product to the U.S. once approved by the Food and Drug Administration. This would be beneficial because PMI’s current partner, Altria Group, is unable to distribute Veev in the U.S. due to its stake in Juul Labs.
Purchasing Swedish Match would also provide PMI with potential distribution for IQOS in the U.S. and allow it to capture the product’s full revenue and margins in the event that Altria loses the right to distribute IQOS, according to Goldman Sachs. Altria’s IQOS distribution deal expires in April 2024, but PMI and Altria currently disagree about whether Altria has thus far met the milestones to earn the renewal option for an additional five-year deal.
The U.S. currently bans IQOS imports following an intellectual property dispute with BAT.
Acquiring Swedish Match would also provide PMI with a move diversified geographic exposure, reducing the impact of swings in currency exchange rates.
While considering a potential deal positive for PMI, Goldman Sachs says it could be potentially negative for Altria as PMI could evolve from a partner to a formidable competitor on Altria’s home turf. Morgan Stanley said it would also make the long-mulled recombination of PMI and Altria less likely.
May 10, 2022
Match Sets Dividend and Elects Directors

Photo: Swedish Match
Participants in Swedish Match’s annual general meeting on April 27 resolved to pay a dividend of SEK1.86 ($0.19) per share distributed to the shareholders in two equal payments of SEK0.93 per share, the company announced in a press note.
The record date for the right to receive a cash dividend for the first payment is April 29, 2022, and payment through Euroclear Sweden is expected to be made on May 4, 2022. The record date for the second payment is Nov. 14, 2022, and payment through Euroclear Sweden is expected to be made on Nov. 17, 2022.
The board of directors and the CEO were granted discharge for the financial year 2021.
Charles A. Blixt, Jacqueline Hoogerbrugge, Conny Karlsson, Alexander Lacik, Pauline Lindwall and Joakim Westh were reelected as members of Swedish Match’s board of directors. Sanna Suvanto-Harsaae was elected as a new member of the board of directors. Conny Karlsson was reelected as chairman of the board.
The annual general meeting elected Deloitte as auditor until the end of the annual general meeting 2024.
The board of directors’ remuneration report for 2021 was adopted. Furthermore, the annual general meeting approved the board of directors’ proposal that it be authorized to resolve on acquisition of the company’s own shares, on one or several occasions prior to the next annual general meeting, provided the company’s holding does not at any time exceed 10 percent of all shares in the company. The shares shall be acquired on Nasdaq Stockholm at a price within the price interval registered at any given time, i.e., the interval between the highest bid price and the lowest selling price. Swedish Match owns 59,285,810 treasury shares as per April 27, 2022.
In addition, the company’s share capital was reduced by SEK13,559,080.98 by means of withdrawal of 55,000,000 previously repurchased shares held in treasury, with a simultaneous bonus issue, without issuing any new shares, of a corresponding amount to restore the share capital. The shareholders further approved the proposal that the reduction will be allocated to a fund for use pursuant to a resolution adopted by the annual general meeting.
The annual general meeting approved all other proposals made by the board of directors and the nominating committee. The proposals are outlined in the published notice of the annual general meeting.
April 27, 2022
Swedish Match Publishes 2021 Report

Photo: Swedish Match
Swedish Match has published its annual report for 2021.
The annual report describes Swedish Match’s operations, strategy and financial development and is available to download at www.swedishmatch.com/annual-reports.
Swedish Match reported record sales and operating profit in 2021, with double-digit growth in both revenues and earnings in local currencies across all product segments.
Full-year growth was driven by strong performance in the Smokefree product segment with considerable growth in both the U.S. and Scandinavia. Growing demand for natural leaf cigars drove the robust full year local currency financial performance for the Cigars product segment. The lights product segment too displayed strong underlying performance.
“Our sales performance in 2021 was outstanding, hitting a new all-time high,” said Lars Dahlgren, CEO of Swedish Match, in statement. Dahlgren was particularly pleased with the performance and potential of the company’s nicotine pouches, which grew by more than 50 percent in the U.S. and Scandinavia in 2021.
March 25, 2022
SM Pauses Separation of Cigar Business

Photo: Swedish Match
Swedish Match has suspended the separation of its cigar business until further notice.
On Sept. 14, 2021, Swedish Match announced its intention to spin off its cigar business to shareholders and subsequently list it on a U.S. national securities exchange. The separation was initially expected to be completed in the second half of 2022, at the earliest.
The decision to suspend the separation was driven by regulatory uncertainties, according to Swedish Match.
“While supply chain related challenges have contributed to the financial development of the U.S. cigar business falling short of Swedish Match’s expectations in recent quarters, today’s decision to suspend the spin-off preparations was prompted by regulatory uncertainties facing the cigar business,” the company wrote in a statement.
The U.S. Food and Drug Administration recently denied substantial equivalence (SE) designations for applications corresponding to about 3 percent of Swedish Match’s 2021 cigar volume. According to Swedish Match, it cannot be ruled out that additional SE applications for the cigar assortment will be denied in the first instance as FDA continues to work through remaining applications.
Swedish Match said it plans to appeal the non-SE designations by the FDA by requesting a supervisory review. The company remains confident that it will be given the opportunity to provide the FDA with sufficient data in order to demonstrate that the cigars in question are substantially equivalent to their predicate products insofar that the changes that have taken place do not raise questions of public health.
“Swedish Match is confident that the above-mentioned issues will be resolved or efficiently mitigated in due course,” the company wrote in its statement. “However, the board’s view is that the decision to suspend spin-off preparations until further notice is in the best interests of our shareholders. As the potential impacts from regulatory uncertainties have been clarified, the Swedish Match board expects to resume plans to separate the cigar business.”
March 15, 2022
Suvanto-Harsaae Nominated For Board

Photo: Swedish Match
Swedish Match’s nominating committee will propose the election of Sanna Suvanto-Harsaae as a new member of the company’s board of directors during the annual general meeting on April 27, the company announced in press release.
Suvanto-Harsaae has experience across a number of industries, notably in the areas of consumer and B2B2C for fast-moving consumer goods, logistics, e-commerce and service supply. The nominating committee has made particular note of Suvanto-Harsaae’s broad industry knowledge and board experience in Nordic listed companies.
She is currently also chair of the boards of BoConcept, Posti Group, Nordic Pet Care Group and Babysam.
The nominating committee proposes reelection of the current board members Conny Karlsson, Charles A. Blixt, Jacqueline Hoogerbrugge, Alexander Lacik, Pauline Lindwall and Joakim Westh. Current Swedish Match board members Andrew Cripps and Wenche Rolfsen will not be available for reelection.
The nominating committee proposes Conny Karlsson as chairman of the board.
March 8, 2022
Dalli: ‘No Evidence for Snus Bribery Allegation’

Photo: Kirill Ryzhov
Former European Commissioner John Dalli, who stands accused of trading in influence and attempted bribery to help lift the EU ban on snus, said that no evidence was brought against him in two recent sittings, according to a report by the Malta Independent.
Dalli’s statement was in reaction to the decision on Friday by Magistrate Caroline Farrugia Frendo that enough evidence has been brought forward for him to stand trial.
Dalli has pleaded not guilty to the charges.
“Some media in Malta must have had a schadenfreude pleasure in reporting the decision of the court that there is a prima facie case against me and therefore the compilation is to continue,” Dalli said.
“Anyone following the case objectively would know that in two sittings, not one shred of evidence has been brought against me. It must be said that it was my choice not to move for the prima facie dismissal of the case. I want this hearing to go through the full process and have the opportunity to expose the machinations of the Commission and OLAF officials about this case. This should start during the next sitting. I hope that there will be no attempt to stop this through claims of immunity.”
The case dates from 2012, when Dalli’s aide Silvio Zammit allegedly tried to obtain a €60 million ($71.17 million) bribe from Swedish Match to reverse the EU ban on snus. The company rejected the offer as improper and reported it to the European Commission.
Zammit who was charged in December 2012 for trading influence and complicity in the request, passed away earlier this year.
February 22, 2022
‘Dalligate’ Aide Dies

Photo: Bits and Splits
Silvio Zammit, a key figure in the “Dalligate” snus bribery scandal, died at age 57, reports Malta Independent.
A Maltese businessman and political canvasser for former EU Health Commissioner John Dalli, Zammit allegedly tried to solicit a €60 million ($68.20 million) bribe from Swedish Match in exchange for using his influence to lift the EU ban on selling snus.
Swedish Match rejected the offer as improper and reported it to the European Commission.
The European Commission forced Dalli to quit in 2012 after the EU’s anti-fraud office uncovered the bribery attempt. Zammit was charged in December 2012 for trading influence and complicity in the request.
The case against Dalli continues. On Feb. 9, 2022, he appeared in a Maltese court charged with bribery and trading influence, according to Euractiv.
Dalli has repeatedly said that he was framed, set up by the tobacco lobby to delay his draft anti-smoking legislation.
A Maltese investigative journalist, Daphne Caruana, who made various allegations against Dalli in her blog “Running Commentary,” was murdered in October 2017.
February 17, 2022
Record Year for Swedish Match

Photo: Swedish Match
Swedish Match reported record sales and operating profit in 2021, with double-digit growth in both revenues and earnings in local currencies across all product segments.
Full-year growth was driven by strong performance in the Smokefree product segment with considerable growth in both the U.S. and Scandinavia. Growing demand for natural leaf cigars drove the robust full year local currency financial performance for the Cigars product segment. The lights product segment too displayed strong underlying performance.
Fourth-quarter performance was driven by the company’s Smokefree segment, with continued strength in the U.S. and Scandinavia. Sales and earning for the Cigars segment declined during the fourth quarter, due in part to production restraints.
In local currencies, sales increased by 16 percent for the full year and by 12 percent for the fourth quarter. Reported sales increased by 11 percent to SEK18.49 billion ($2 billion) for the full year and by 15 percent to SEK4.75 billion for the fourth quarter.
In local currencies, operating profit from product segments increased by 19 percent for the full year and by 11 percent for the fourth quarter. Reported operating profit from product segments increased by 14 percent to SEK8.14 billion for the full year and by 15 percent to SEK1.96 billion for the fourth quarter.
“Our sales performance in 2021 was outstanding, hitting a new all-time high,” said Lars Dahlgren, CEO of Swedish Match, in statement. Dahlgren was particularly pleased with the performance and potential of the company’s nicotine pouches, which grew by more than 50 percent in the U.S. and Scandinavia in 2021.
“The total addressable market for nicotine pouches includes cigarette smokers, but also draws from other oral tobacco products, as well as from the growing pool of consumers who currently use vape
products but have found our nicotine pouches to have greater appeal,” said Dahlgren.
February 16, 2022
Red Man Rebrands as America’s Best Chew

Photo: Swedish Match
Swedish Match is rebranding its Red Man chewing tobacco to America’s Best Chew to better align with the company’s contemporary values. The name change comes as the product celebrates its 135th anniversary.
While the new packaging will reflect the rebrand, the product is the same. According to Swedish Match, consumers can expect the same high-quality chewing tobacco that has been enjoyed by generations, right down to the unmistakable aroma, texture and flavor.
“Understanding that an essential part of being America’s best means being a leader, Swedish Match worked diligently over the past several months to make changes in response to our heightened awareness and our desire to be more inclusive,” said Joe Ackerman, vice president of marketing at Swedish Match, in a statement. “Consumers and diverse agency partners were selected to participate in the rebranding research. It was critical and valuable for us to gain these insights and recommendations to develop America’s Best Chew packaging.”
“I applaud the Swedish Match company for retiring the use of ‘Red Man’ as a product name,” said Cherokee Nation Principal Chief Chuck Hoskin, Jr. “Nationally, we are moving away from the use of derogatory terms and depictions of Native Americans as product mascots because representations are stereotypical caricatures, and they do not honor us or reflect how we live and thrive, both as individuals and as unique Tribal Nations today. The announcement to change the brand’s name and imagery gives us hope that more companies, schools and sports teams hear us and that we will continue to make impactful national changes for the betterment of Indian Country.”
“This decision exemplifies the global awakening of these harmful practices toward Indigenous Peoples and gives us hope that others will follow Swedish Match’s bold and courageous lead,” said Fawn Sharp, president of the National Congress of American Indians.
“While the phrase ‘America’s Best Chew’ may have gone unnoticed to some, it is an essential part of who we are,” according to Ackerman. “It represents our founder John Pinkerton’s passion and commitment to quality. More importantly, America’s Best Chew was the promise that Pinkerton made 135 years ago when he created the original recipe and innovative flavoring process that we still use today.”
The transition to the new America’s Best Chew packaging will begin within the next few weeks.
January 21, 2022