Tobacco Giant PMI Weighs Sale of Marlboro Cigarette Business
Philip Morris International CEO Jacek Olczak told the Daily Mail that the company had considered selling its Marlboro cigarette business as part of a plan to exit the cigarette sector. However, according to the British tabloid, the company ultimately deci
Philip Morris International CEO Jacek Olczak told the Daily Mail that the company had considered selling its Marlboro cigarette business to exit the cigarette industry.
However, according to reports from British tabloids, the company ultimately decided to retain the business to help fund the growth of its "healthier" products.
"Yes, we discussed [selling the Marlboro cigarette business]. Our conclusion is that if we keep the cigarettes, it will actually accelerate our journey [from traditional tobacco revenue], because I can allocate resources," Olczak said.
According to Olczak, three-quarters of PMI's resources are focused on finding alternatives to cigarettes.
Olczak made these remarks as PMI faces increasing opposition from health activists regarding its plans to acquire the UK inhaler company Vectura. Earlier this month, Vectura's board stated that it would support PMI's £1.1 billion ($1.5 billion) takeover bid after the cigarette manufacturer's offer exceeded that of private equity firm Carlyle.
Medical and health experts have warned that this deal could jeopardize Vectura's key contracts and government grants. Earlier this month, a group of 35 health experts wrote an open letter stating that the tobacco company's acquisition would "seriously hinder" Vectura's operational strategy as a research-focused pharmaceutical company.
PMI has stated that its bid for Vectura is part of its transition to a "smoke-free" future, where it sells reduced-risk e-cigarettes and "healthier" products. The cigarette manufacturer aims for 50% of its revenue to come from smoke-free products by 2025.
Philip Morris needs support from over 50% of shareholders for its Vectura bid before September 15.
