Tobacco group Philip Morris pays €15.3bn for Swedish Match

Philip Morris International has agreed to buy tobacco and nicotine products maker, Swedish Match, in a $16 billion (€15.3 billion) deal that aims to cut the US company's dependence on cigarettes.

In a bet on fast-growing markets for cigarette alternatives, Marlboro brand maker Philip Morris said on Wednesday it was making a cash offer for the Stockholm-based group at 106 crowns per share, valuing it at 161.2 billion crowns (€15.3 billion). Swedish Match's board has recommended the offer.

Swedish Match shares were up almost 9 per cent to a record SKr103.30, having jumped already on Tuesday when the US tobacco giant confirmed reports it was in talks to buy the firm.

The Swedish company makes most of its profit from Swedish-style moist snuff called "snus". Sales of its relatively new Zyn tobacco-free nicotine pouches – which are, like snus, put under the upper lip and sucked – are growing rapidly in Scandinavia and the United States as consumers become more health-conscious.

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Swedish Match dropped cigarettes in 1999 and wants to spin off its cigar business, a move that would mean a full exit from combustible products. Philip Morris aims for smoke-free products to account for more than half of sales by 2025. – Reuters