Philip Morris International (PMI) said on July 31 it has struck a friendly matchup with Canadian tobacco company Rothmans Inc. in a two billion Canadian dollar (US$1.9 billion) takeover deal. PMI, the global cigarette maker and distributor of leading brand Marlboro, already owns a 40% stake in Rothmans, Benson & Hedges (RBH).
Rothmans Inc.'s sole holding is its 60% interest in RBH, whose brands include Rothmans, Benson & Hedges, Craven A and Belmont. PMI and Rothmans have been joint shareholders of RBH since 1986.
The takeover offer of 30 Canadian dollars per share represents a 14% premium to Rothmans's closing share price on July 30, PMI said.
PMI said it had agreed to make the offer following Rothmans's and RBH's finalization of a 550 million Canadian dollar settlement with the government of Canada and all 10 provinces, announced separately on July 31 by Rothmans.
The settlement resolves the Royal Canadian Mounted Police's investigation relating to tobacco products exported from Canada by RBH during the 1989-1996 period. RBH has agreed to plea guilty to a single count of violating a provision of Canada's excise law, Rothmans said.
PMI, which was spun off in March by U.S. tobacco company Altria, has a broad range of brands including Philip Morris, Chesterfield, Parliament and Virginia Slims. Its products are sold in more than 160 countries.
Copyright Agence France-Presse, 2008