Philip Morris sweetens bid to snap up snus maker Swedish Match

Philip Morris has sweetened its bid to grab smokeless tobacco specialist Swedish Match, as the cigarette giant makes a desperate push into alternative categories.

The Malboro maker has today raised its offer for the nicotine pouch maker to 116 kronor ($10.34) per share from 106 kronor, hoping to finalise the takeover and appease hedge funds who have been craving a higher bid.

The deal is now estimated to be worth around $15.7bn, and signals a major win for Swedish Match shareholders.

Swedish Match’s shares have jumped nearly 50 per cent since the PMI first announced its cash offer for the Stockholm-based group.

Sources told Bloomberg that although Philip Morris’ (PMI) attempts to grab the firm have been challenged by hedge funds, led by Elliot Management, at least four of those funds are now poised to tender their stakes.

PMI chief exec Jacek Olczak said today’s bid was its “best and final” offer, which would benefit both sides.

Just this week, Philip Morris agreed to pay tobacco group Altria around $2.7bn for the US commercialisation rights for e-cigarette brand IQOS.

It is understood that the firm plans to utilise Swedish Match’s retail distribution channels to push these new products in the US.

The majority of Swedish Match’s products are sold in the States and Scandinavia, and the company develops and manufactures a variety of products, including Smokefree, Cigars, and Lights.

However, Olczak did state that even if the deal with Swedish Match fails, “we are well prepared to proceed autonomously to develop IQOS and  the rest of our smoke-free portfolio in the U.S.”