Philip Morris International (PMI) will go ahead with its USD 16 billion acquisition of Swedish Match, despite holding slightly less than the targeted 90 per cent stake, Reuters reports.
PMI said on 7 Oct. that it had secured 82.59 per cent of the Swedish company, below the 90 per cent mark at which a compulsory purchase of the remaining shares could be initiated. The US group, which had previously said it could withdraw its offer if it did not reach that threshold, said it believed the level could ultimately be reached. “Our intention is still to take the company entirely private, so it is better for the (Swedish Match) shareholders if they tender their shares,” PMI Chief Executive Jacek Olczak told Reuters.
PMI had made an offer to buy Swedish Match in May at SEK 106 (USD 9.71) per share and raised it to SEK 116 per share in October after some investors thought the original price was too low.
The deal is said to help pave the way for PMI to enter the US market, where Swedish Match has been rapidly expanding its business and where PMI currently has no presence. Olczak said he was looking forward to growing Swedish Match internationally using PMI’s infrastructure. Swedish Match declined to comment.
PMI said it expects the Swedish group’s 10 largest shareholders to have accepted its offer and that its offer will be extended to 25 Nov. in hopes of further increasing its stake. That would mean that both activist investor Elliott Management and Davidson Kempner, which held 10.5 per cent and 5 per cent of the shares, respectively, had tendered their shares, Reuters said.