Regulatory News:
This announcement is not an offer, whether directly or
indirectly, in Australia, Hong Kong, Japan, New Zealand, or South
Africa or in any other jurisdiction where such offer pursuant to
legislation and regulations in such relevant jurisdiction would be
prohibited by applicable law. Shareholders not resident in Sweden
who wish to accept the Offer (as defined below) must make inquiries
concerning applicable legislation and possible tax consequences.
Shareholders should refer to the offer restrictions included in the
section titled “Important information” at the end of this
announcement and in the offer document, which has been published on
the Offer website (www.smokefree-offer.com). Shareholders in the
United States should also refer to the section entitled “Special
notice to shareholders in the United States” at the end of this
announcement.
On May 11, 2022, Philip Morris Holland Holdings B.V.1
(“PMHH”), an affiliate of Philip Morris International Inc. (“PMI”),
announced a recommended public offer to the shareholders of Swedish
Match AB (“Swedish Match”) to tender all shares in Swedish Match2
to PMHH (the “Offer”). On November 7, 2022, PMHH declared
the Offer unconditional and announced that it would complete the
Offer and acquire all shares in Swedish Match that have been
tendered in the Offer. In addition, PMHH extended the acceptance
period until November 25, 2022 and informed the Swedish Match
shareholders that the price in the Offer for shares tendered during
the further extended acceptance period would be reduced to SEK
115.07 in cash per share due to the resolved dividend payment by
Swedish Match of SEK 0.93 per share for shareholders of record as
of November 14, 2022. Today, PMHH announces that it becomes the
owner of 93.11 percent2 of the shares in Swedish Match.
The Offer is now closed. The shares tendered in the Offer at the
end of the acceptance period (which expired on November 4, 2022)
amounted to in aggregate 1,255,989,816 shares in Swedish Match2,
corresponding to approximately 82.59 percent2 of the share capital
and the voting rights in Swedish Match. On November 10, 2022, PMHH
announced that PMHH had acquired 49,899,948 shares in Swedish Match
outside the Offer, corresponding to approximately 3.28 percent2 of
the share capital and the voting rights in Swedish Match, since the
announcement of the outcome of the Offer on November 7, 2022.
The shares tendered in the Offer during the further extended
acceptance period (which expired on November 25, 2022) amount to in
aggregate 80,933,854 shares in Swedish Match, corresponding to
approximately 5.32 percent2 of the share capital and the voting
rights in Swedish Match. In addition, PMHH has acquired an
additional 29,164,342 shares in Swedish Match outside the Offer,
corresponding to approximately 1.92 percent2 of the share capital
and the voting rights in Swedish Match, since the announcement of
the press release on November 10, 2022. No acquisitions have been
made at a price exceeding the price in the Offer.
Accordingly, the total number of shares in Swedish Match held by
PMHH, including the shares tendered in the Offer at the end of the
further extended acceptance period on November 25, 2022, amounts to
1,415,987,960 shares, corresponding to approximately 93.11 percent2
of the share capital and the voting rights in Swedish Match.
“We are delighted to have obtained over 90% ownership of Swedish
Match, allowing us to initiate a minority redemption process to
acquire the remaining shares outstanding and request the delisting
of the company from the stock market,” said Jacek Olczak, Chief
Executive Officer of PMI. “This transaction marks a major milestone
in accelerating our shared objective of a smoke-free future. We
look forward to welcoming Swedish Match’s employees and leading
oral nicotine portfolio into the PMI family to create a global
smoke-free champion, notably bringing IQOS and ZYN together in both
the U.S. and international markets. We are very excited about the
growth, value creation and progress in Tobacco Harm Reduction that
we believe can be achieved together over the coming years. Despite
the increased cost of financing over recent months, we expect the
combination to be low single-digit accretive to PMI’s adjusted
diluted EPS in 2023, before potential revenue synergies and
excluding transaction-related and one-off costs and the
amortization of acquired intangibles.”
Background and Transaction rationale
In 2016, PMI announced its new mission to replace cigarettes
with science-based, less harmful alternatives as soon as
possible—to the benefit of people who smoke, public health, PMI,
and society. The proof of PMI's commitment to this mission and
strong progress to date is undeniable: In 2015, essentially all of
PMI's net revenues came from cigarettes. In 2021, nearly 30 percent
came from smoke-free products. By 2025, PMI aims to be a
predominantly smoke-free company, with more than half of its net
revenues coming from such products.
While cigarettes represent PMI's past and are part of its
present, they do not represent its future. Since 2008, PMI has
invested more than USD 9 billion in researching, developing, and
commercializing its smoke-free products. PMI has built world-class
scientific assessment capabilities, notably in the areas of
preclinical systems toxicology, clinical and behavioral research,
as well as post-market studies. And it has met the strictest
regulatory requirements for its sector, including in the U.S.,
where the Food and Drug Administration has authorized versions of
PMI's leading heated tobacco product, IQOS, as “modified risk
tobacco products” (MRTPs), finding that exposure modification
orders for these products are appropriate to promote the public
health.
PMI and Swedish Match share a mutual vision of a world without
cigarettes and a strong commitment to developing, scientifically
substantiating, and responsibly commercializing smoke-free products
that are less harmful than cigarettes. PMI values how Swedish Match
has relentlessly pursued tobacco harm reduction through its range
of smoke-free products; received authorizations for its products
via strict regulatory pathways in the U.S.; and reshaped the public
health environment in countries such as Sweden and Norway.
As PMI continues to evolve its business for the long term, it
believes that the two companies will be a perfect pairing of
strategic vision, culture, and enterprise. Together, the companies
will be able to create a global, science-led smoke-free champion,
combining expertise in heated tobacco and oral nicotine—including
multiple MRTP authorizations—as well as PMI's emerging presence in
e-vapor products, to switch more adult smokers to better
alternatives than the two could achieve as separate companies.
Swedish Match will lead the combined company’s oral nicotine
business.
The combination with Swedish Match positions PMI to:
- create a comprehensive smoke-free product portfolio globally,
underpinned by a leading R&D engine for science, innovation,
and growth through the companies' complementary capabilities;
- directly enter and compete in the large, attractive and growing
U.S. smoke-free market by: (i) further supporting and developing
Swedish Match's oral nicotine portfolio in the U.S. and (ii)
leveraging Swedish Match's substantial operational platform in the
U.S. to unlock commercial opportunities across other smoke-free
categories in the coming years, including with IQOS as of April 30,
2024; and
- drive accelerated global expansion opportunities for Swedish
Match's oral nicotine products through PMI's international
commercial infrastructure and financial resources.
We expect that the combination will immediately enhance PMI's
already strong growth profile and support additional opportunities
in the U.S. and internationally over time. Despite the increased
cost of financing over recent months, we expect the combination to
be low single-digit accretive to PMI’s adjusted diluted EPS in
2023, before potential revenue synergies and excluding
transaction-related and one-off costs and the amortization of
acquired intangibles. Importantly, Swedish Match's operating cash
flow comprises meaningful U.S. dollar net income, thereby improving
PMI's currency profile.
The transaction will result in a combined company with a strong
balance sheet and leverage of approximately 3x net debt to adjusted
EBITDA, with deleveraging anticipated over the next few years. PMI
remains committed to its strong single-A credit ratings, as a
growing and highly cash-generative business. To support
deleveraging, PMI has suspended its current three-year share
repurchase program, which began in July 2021. PMI also remains
committed to its progressive dividend policy, while gradually
reducing its adjusted diluted EPS payout ratio to around 75% over
time.
PMI recognizes that the employees and management team of Swedish
Match have built a highly successful business with an excellent
track record, and PMI has the utmost respect for them. PMI's
current plans for the future business and general strategy, as
described above, do not include any material changes with regard to
Swedish Match's operational sites, or its management and employees,
including their terms of employment. Swedish Match has a
complementary organization with a talented, dedicated workforce,
excellent culture and a strong base of skills in Sweden, the U.S.
and across the world. PMI intends to nurture this talent and
provide additional opportunities as the companies grow together.
Importantly, PMI intends to provide compensation and benefits
consistent with Swedish Match's current programs, including the
Profit Sharing Foundation in Sweden. In addition, PMI intends to
preserve and develop Swedish Match's operational presence in
Sweden, where much of the company’s skills base is located, as well
as in Richmond, Virginia, the site of the head office for Swedish
Match's U.S. Division. PMI has no plans to divest the Lights
business.
Certain terms of the Offer
PMHH has decided not to further extend the acceptance period.
Settlement for shares tendered in the Offer during the extended
acceptance period (which expired on November 25, 2022), is expected
to be initiated around December 2, 2022. PMHH reserves the right to
postpone the settlement date, provided however, that settlement
shall in any event be made within 7 business days following the
expiration of the acceptance period. PMHH will announce any
postponement of the settlement date by a press release in
accordance with applicable laws and regulations.
PMHH intends to initiate compulsory redemption under the Swedish
Companies Act (Sw. aktiebolagslagen (2005:551)) to acquire all
remaining shares in Swedish Match. PMHH also intends to request
delisting of Swedish Match’s shares from Nasdaq Stockholm.
Prior to the announcement of the Offer, neither PMHH nor any
closely related companies or closely related parties owned or
otherwise controlled any shares in Swedish Match or other financial
instruments that give financial exposure to Swedish Match’s shares.
Apart from the 79,064,290 shares in Swedish Match that PMHH has
acquired outside the Offer, as described above, neither PMHH or any
closely related companies or closely related parties have acquired
any shares in Swedish Match or other financial instruments that
give financial exposure to Swedish Match’s shares outside the
Offer. To the extent permissible under applicable law or
regulations, PMHH and its affiliates may acquire, or take measures
to acquire, additional shares in Swedish Match in other ways than
through the Offer. Information about such acquisitions of shares,
or measures to acquire shares, will be disclosed in accordance with
applicable laws and regulations.
Due to the resolved dividend payment by Swedish Match of SEK
0.93 per share with record date for the payment on November 14,
2022, and date for payment through Euroclear Sweden on November 17,
2022, the price in the Offer for shares tendered during the further
extended acceptance period has, in accordance with the terms and
conditions of the Offer4, been reduced accordingly to SEK 115.07 in
cash per share. For further information regarding Swedish Match’s
resolution on dividends at the annual general meeting 2022, please
refer to Swedish Match’s website, www.swedishmatch.com. Since the
Offer has been declared unconditional, shareholders who have
accepted the Offer have no right to withdraw acceptances.
For administrative questions regarding the Offer, please contact
your bank or the nominee registered as holder of your shares.
The information was submitted for publication on November 28,
2022 at 12 p.m. (CET).
Information about the Offer
www.smokefree-offer.com
Important information
This press release has been published in Swedish and English.
In the event of any discrepancy in content between the two language
versions, the Swedish version shall prevail.
This announcement is not an offer, whether directly or
indirectly, in Australia, Hong Kong, Japan, New Zealand, or South
Africa or in any other jurisdiction where such offer pursuant to
legislation and regulations in such relevant jurisdiction would be
prohibited by applicable law (each a “Restricted Jurisdiction”).
This offer constitutes an "exempt take-over bid" for purpose of
applicable Canadian securities laws and shareholders resident in
Canada are entitled to participate in the Offer on the same terms
as shareholders in other applicable jurisdictions.
The release, publication, or distribution of this press
release in or into jurisdictions other than Sweden may be
restricted by law, and therefore any persons who are subject to the
laws and regulations of any jurisdiction other than Sweden should
inform themselves about and observe any applicable requirements. In
particular, the ability of persons who are not resident in Sweden
to accept the Offer may be affected by the laws and regulations of
the relevant jurisdictions in which they are located. Any failure
to comply with the applicable restrictions may constitute a
violation of the securities laws and regulations of any such
jurisdiction. To the fullest extent permitted by applicable laws
and regulations, the companies and persons involved in the Offer
disclaim any responsibility or liability for the violation of such
restrictions by any person.
This announcement has been prepared for the purpose of
complying with Swedish law, the Takeover Rules, and the Swedish
Securities Council’s rulings regarding interpretation and
application of the Takeover Rules, and the information disclosed
may not be the same as that which would have been disclosed if this
press release had been prepared in accordance with the laws and
regulations of jurisdictions other than Sweden.
Unless otherwise determined by PMHH or required by Swedish
law, the Takeover Rules and the Swedish Securities Council’s
rulings regarding interpretation and application of the Takeover
Rules, and permitted by applicable law and regulation, the Offer
will not be made available, directly or indirectly, in, into, or
from a Restricted Jurisdiction or any other jurisdiction where to
do so would violate the laws and regulations in that jurisdiction,
and no person may accept the Offer by any use, means, or
instrumentality (including, but not limited to, facsimile, email,
or other electronic transmission, telex, or telephone) of
interstate or foreign commerce of, or of any facility of a
national, state, or other securities exchange of any Restricted
Jurisdiction or any other jurisdiction where to do so would
constitute a violation of the laws and regulations of that
jurisdiction, and the Offer may not be capable of acceptance by any
such use, means, instrumentality, or facilities. Accordingly,
copies of this press release and any formal documentation relating
to the Offer are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed, or sent in
or into or from any Restricted Jurisdiction or any other
jurisdiction where to do so would constitute a violation of the
laws and regulations of that jurisdiction, and persons receiving
such documents (including custodians, nominees, and trustees) must
not mail or otherwise forward, distribute, or send them in or into
or from any Restricted Jurisdiction or any other jurisdiction where
to do so would constitute a violation of the laws and regulations
of that jurisdiction.
The availability of the Offer to shareholders of Swedish
Match who are not resident in and citizens of Sweden may be
affected by the laws and regulations of the relevant jurisdictions
in which they are respectively located or of which they are
citizens. Persons who are not resident in or citizens of Sweden
should inform themselves of, and abide by, any applicable legal or
regulatory requirements of their jurisdictions.
The Offer and the information and documents contained in this
press release are not being made and have not been approved by an
authorized person for the purposes of section 21 of the U.K.
Financial Services and Markets Act 2000 (the “FSMA”). Accordingly,
the information and documents contained in this press release are
not being distributed to, and must not be passed on to, the general
public in the United Kingdom, unless an exemption applies. The
communication of the information and documents contained in this
press release is exempt from the restriction on financial
promotions under section 21 of the FSMA on the basis that it is a
communication by or on behalf of a body corporate that relates to a
transaction to acquire day-to-day control of the affairs of a body
corporate or to acquire 50 percent or more of the voting shares in
a body corporate, within article 62 of the U.K. Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005.
This press release contains statements relating to future
status or circumstances, including statements regarding remaining
transactional steps and requirements and the ultimate success of
the acquisition, that are forward-looking statements made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements may generally, but not always,
be identified by the use of words such as “anticipates,” “intends,”
“expects,” “believes,” or similar expressions, and include, without
limitation, the statements made by Mr. Jacek Olczak. By their
nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. There can be no assurance that actual results
will not differ materially from those expressed or implied by these
forward-looking statements due to many factors, many of which are
outside the control of PMI and PMHH. Any such forward-looking
statements speak only as of the date on which they are made, and
PMI and PMHH have no obligation (and undertake no such obligation)
to update or revise any of them, whether as a result of new
information, future events, or otherwise, except for in accordance
with applicable laws and regulations.
Merrill Lynch International (“BofA Securities”) and Citigroup
Global Markets Limited (“Citi”), which are authorized by the
Prudential Regulation Authority (“PRA”) and regulated in the U.K.
by the Financial Conduct Authority (“FCA”) and the PRA, are acting
as financial advisers for PMHH and for no one else in connection
with the Offer and will not be responsible to anyone other than
PMHH for providing the protections afforded to their respective
clients or for providing advice in connection with the Offer or any
other matters referred to in this announcement. Neither BofA
Securities, Citi, nor any of their respective affiliates,
directors, or employees owes or accepts any duty, liability, or
responsibility whatsoever (whether direct or indirect,
consequential, whether in contract, in tort, in delict, under
statute or otherwise) to any person who is not a client of BofA
Securities or Citi, respectively, in connection with this
announcement, any statement contained herein, the Offer, or
otherwise.
Special notice to shareholders in the United States
The Offer described in this press release is made for the
issued and outstanding shares of Swedish Match, a company
incorporated under Swedish law, and is subject to Swedish
disclosure and procedural requirements, which may be different from
those of the United States. In the United States, the Offer will
also be made in accordance with certain provisions of the United
States federal securities laws, to the extent applicable, including
Section 14(e) of the U.S. Securities Exchange Act of 1934, as
amended, and Regulation 14E thereunder (“Regulation 14E”); provided
that PMHH has requested, and the Division of Corporation Finance of
the U.S. Securities and Exchange Commission (the “SEC”) has
granted, relief exempting the Offer from certain requirements of
Regulation 14E in order to align aspects of the Offer in which
Swedish laws and market practice conflict with U.S. federal
securities laws. Accordingly, the disclosure and procedures
regarding the Offer, including with respect to withdrawal rights,
the Offer timetable, notices of extensions, announcements of
results, settlement procedures (including as regards to the time
when payment of the consideration is rendered), and waivers of
conditions, may be different from requirements or customary
practices in relation to U.S. domestic tender offers. Holders of
the shares of Swedish Match domiciled or resident in the United
States (the “U.S. Holders”) are encouraged to consult with their
advisers regarding the Offer.
Swedish Match’s financial statements and all financial
information included herein, or any other documents relating to the
Offer, have been or will be prepared in accordance with
International Financial Reporting Standards (IFRS) and may not be
comparable to the financial statements or financial information of
companies in the United States or other companies whose financial
statements are prepared in accordance with U.S. generally accepted
accounting principles. The Offer is made to the U.S. Holders on the
same terms and conditions as those made to all other shareholders
of Swedish Match to whom the Offer is being made. Any information
documents, including the offer document, are being disseminated to
U.S. Holders on a basis comparable to the method pursuant to which
such documents are provided to Swedish Match’s other
shareholders.
The U.S. Holders should consider that the price for the Offer
is being paid in SEK and that no adjustment will be made based on
any changes in the exchange rate.
It may be difficult for U.S. Holders to enforce their rights
and any claims they may have arising under the U.S. federal or U.S.
state securities laws in connection with the Offer, since Swedish
Match and PMHH are located in countries other than the United
States, and some or all of their officers and directors may be
residents of countries other than the United States. U.S. Holders
may not be able to sue Swedish Match or PMHH or their respective
officers or directors in a non-U.S. court for violations of U.S.
securities laws. Further, it may be difficult to compel Swedish
Match or PMHH and/or their respective affiliates to subject
themselves to the jurisdiction or judgment of a U.S. court.
To the extent permissible under applicable law or
regulations, and in reliance on relief granted by the SEC exempting
the Offer from certain of the requirements of Rule 14e-5 under
Regulation 14E, PMHH and its affiliates or its brokers and its
brokers’ affiliates (acting as agents for PMHH or its affiliates,
as applicable) may from time to time and during the pendency of the
Offer, and other than pursuant to the Offer, directly or indirectly
purchase or arrange to purchase shares of Swedish Match outside the
United States (or securities that are convertible into,
exchangeable for, or exercisable for such shares). These purchases
may occur either in the open market at prevailing prices or in
private transactions at negotiated prices, and information about
such purchases will be disclosed by means of a press release or
other means reasonably calculated to inform U.S. Holders of such
information, to the extent required by applicable laws and
regulations. In addition, affiliates to the financial advisers to
PMHH may also engage in ordinary course trading activities in
securities of Swedish Match, which may include purchases or
arrangements to purchase such securities as long as such purchases
or arrangements comply with applicable laws and regulations. Any
information about such purchases will be announced in Swedish and
in an English translation available to the U.S. Holders through
relevant electronic media, including the Offer website at
www.smokefree-offer.com, if, and to the extent, such announcement
is required under applicable Swedish or U.S. law, rules, or
regulations.
The receipt of cash pursuant to the Offer by a U.S. Holder
may be a taxable transaction for U.S. federal income tax purposes
and under applicable U.S. state and local, as well as foreign and
other, tax laws. Each shareholder is urged to consult an
independent professional adviser regarding the tax consequences of
accepting the Offer. Neither PMHH nor any of its affiliates and
their respective directors, officers, employees, or agents or any
other person acting on their behalf in connection with the Offer
shall be responsible for any tax effects or liabilities resulting
from acceptance of this Offer.
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY
U.S. STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE
OFFER, MADE ANY COMMENT UPON THE MERITS OR FAIRNESS OF THE OFFER,
MADE ANY COMMENT UPON THE ADEQUACY OR COMPLETENESS OF THIS PRESS
RELEASE, OR MADE ANY COMMENT ON WHETHER THE CONTENT OF THIS PRESS
RELEASE IS CORRECT OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE IN THE UNITED STATES.
For the purposes of this press release, “United States” and
“U.S.” mean the United States of America, including its territories
and possessions and all states of the United States of America and
the District of Columbia.
1 A Dutch private limited liability company (besloten
vennootschap), with corporate registration number 20028955 and
corporate seat in Bergen op Zoom, the Netherlands, indirectly
wholly owned by PMI. 2 Excluding any treasury shares held by
Swedish Match (currently 4,285,810 shares). 3 Including the
1,255,945,656 shares tendered in the Offer at November 4, 2022, as
announced in the outcome press release dated November 7, 2022, and
44,160 shares tendered through late acceptances recorded on the
morning November 7, 2022. 4 According to the terms and conditions
of the Offer, as set out in the offer document regarding the Offer
made public on June 28, 2022, if prior to settlement of the Offer,
Swedish Match (i) distributes dividends or (ii) in any other way
distributes or transfers value to its shareholders, the
consideration in the Offer will be reduced accordingly. As the
payment of the dividend on November 17, 2022 occurred before
settlement of shares tendered in the Offer during the further
extended acceptance period, expected around December 2, 2022, the
SEK 0.93 dividend payment was not received by PMHH, but by the
shareholder registered as of the record date on November 14,
2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221127005103/en/
Philip Morris International
For additional information, please contact:
Investor Relations: New York: +1 (917) 663 2233 Lausanne:
+41 (0)58 242 4666 Email: InvestorRelations@pmi.com
Media Relations: David Fraser Lausanne: +41 (0)58 242
4500 Email: David.Fraser@pmi.com
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