PM Philip Morris International Inc

By Colin Kellaher

Tobacco giants Philip Morris International Inc. (PM) and Altria Group Inc. (MO) on Tuesday confirmed they are discussing a reunion in an all-stock merger of equals.

Based on Monday's closing prices, Philip Morris has a market capitalization of about $121 billion, while Altria sports a market capitalization of roughly $88 billion.

Shares of Philip Morris fell 4% on Monday, with Wells Fargo analyst Bonnie Herzog saying the decline might reflect "renewed speculation about a Philip Morris/Altria combo--a call we first made in December 2016 and we still very much believe will happen."

Shares of Altria surged 9.9%, to $51.77, in early trading Tuesday, while Philip Morris fell 4.7%, to $74.09.

Altria and Philip Morris said they could give no assurance that the talks would lead to any agreement or transaction, adding that they will "make no further comment regarding the discussions unless and until it is appropriate to do so."

Altria in early 2008 completed the spinoff of Philip Morris, allowing its giant overseas tobacco division to concentrate on international markets while Altria remained focused on the U.S. The companies share many of the same brands, including the top-selling Marlboro.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

August 27, 2019 10:13 ET (14:13 GMT)

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