Swedish Match matched with PM

Source from:  Tobacco Reporter  11/16/2007

Citigroup believes there is a 50 percent change that Philip Morris USA will buy Swedish Match in the next 18 months. Acquiring Swedish Match would significantly enhance PM USA’s “adjacency” strategy, according to the investment bank. Facing declines in its core cigarette business, PM USA has been expanding into other tobacco products with more attractive fundamentals. Following the launch of snus products in selected tests markets, PM USA in December acquired John Middleton cigars. Citigroup says the combination of PM USA, John Middleton and Swedish Match would be the No. 1 in U.S. cigarettes, premium cigars, mass-market cigars and chewing tobacco. It would be a rapidly growing No. 3 in smokeless. Acquiring Swedish Match would also make PM USA the world’s leading supplier of snus, which has been gaining ground recently.