Industry-leading tobacco and cigarette businesses Philip Morris and Altria have recently been in talks about a potential blockbuster merger. The two companies had previously split 11 years ago to separate their international and domestic operations. Philip Morris currently has a market value of nearly $116 Billion, while Altria is hovering around $86 Billion. This deal could possibly be the largest merger since the AT&T-Time Warner merger of 2016.
The potential transaction would give Philip Morris approximately 58% ownership of the new company. Altria has been making huge strides in the e-cigarette business, most notably with their $12.8 Billion investment in Juul. Wells Fargo analyst Bonnie Herzog said, “Juul would have an ideal partner for its international expansion in Philip Morris”. This merger would serve as a strategic move for each company to diversify their product offerings and capitalize on the rapidly growing e-cigarette market. Shares of Philip Morris have dropped about 4% in response to the news, while Altria shares have seen a slight uptick.