Philip Morris International (PMI) has sold a 10.8-per-cent-stake in Godfrey Philips India (GPI) to KK Modi IFS, its partner in the Indian joint venture.

K K Modi Investment and Financial services (KK Modi IFS), a subsidiary of the KK Modi Group, will acquire Philip Morris’s 11,22,201 shares in the joint venture GPI, which was set up 1979 and which sells cigarette brands like Four Square, Jaisalmer, Red & White, Cavanders and Tipper in India.
The transaction, which was executed last week, brings KK Modi group’s share in the joint venture to 46.984 per cent, while Philips Morris’s stake will drop to around 25 per cent.
The interests of the two companies had clashed in 2003 when PMI bypassed its Indian partner and struck an arrangement with a local distributor Barakat Foods & Tobacco to sell Marlboro in India. PMI said at that time Marlboro, its iconic brand, was too precious to be given to a company not controlled by it.
According to a report in The Economic Times in April 2009, the two JV partners are looking at floating a separate company to market Marlboro. The new company, reportedly, will not market any of the existing brands of GPI and PMI will hold a majority stake in the new company. (pi)