Together, their corporate, proverbial hands locked together, Altria and Philip Morris International announced earlier today, on Tuesday, Aug. 27, 2019, that they were working out ways to merge the two companies together. Philip Morris International and Altria are currently talking about splitting ownership of the company they’d create in the proportion of 59 to 41, respectively, in percentage terms, according to unnamed sources who are familiar with the potential merger’s inner workings.
Tobacco is one of the most addictive psychoactive substances, out of those currently known to man that are used on at least a somewhat-mainstream level, according to countless medical and otherwise scientific journal-accepted studies that have been published over the past few decades. Nicotine is what makes tobacco so addictive, even though it typically doesn’t impair the cognitions or motor skills of regular consumers.
Tobacco has always been legal in the United States, and has long been overseen by federal government regulators.
Despite its overwhelming success over the past century or even longer, the domestic tobacco market has faced substantial competition from tobacco substitutes such as vaping, which consists of vaporizing liquids, which are usually either solely propylene glycol or primarily propylene glycol, that may or may not contain nicotine, and the widespread legalization of cannabis on the state level for either medicinal or recreational purposes by over half of the United States’ state governments.
Juul is a leader in the domestic vaping space, which is a brand of sleek, trendy vaporizers that use disposable “pods” that contain vaporizable solutions with flavoring and nicotine present. Juul was recently invested in by Altria to the tune of $12.8 billion in exchange for a 35 percent share of ownership in the company. Although regulators haven’t signed off on the deal, it’s likely to go through, industry experts believe. Altria also bought a 45 percent stake in Cronos, a cannabis industry competitor based in Canada, for $1.8 billion.
Sales of tobacco cigarettes, which are nothing more than souped-up nicotine delivery devices that contain tons of harmful chemicals that help improve the absorption of nicotine by the human body, have steadily dropped for at least the past five years, falling more than 500 billion cigarettes over the time period.
Philip Morris International has already had its proprietary iQOS approved by the United States Food and Drug Administration, an alternative tobacco consumption device, that has been brought to nearly 50 international markets. iQOS is slated to be rolled out in the U.S. next month. PMI already estimates there are 11 million users of iQOS devices worldwide. The two companies want to merge to ultimately become more competitive in the global tobacco market, as well as its alternatives, such as cannabis and vaping.
Source: https://www.wsj.com/articles/philip-morris-altria-discussing-all-stock-merger-of-equals-11566913969
Dil Bole Oberoi
