Announcement of a public offer for all the outstanding shares of Swedish Match
On May 11, 2022, Philip Morris Holland Holdings B.V., a limited liability company organized under the laws of The Netherlands and an indirect wholly-owned subsidiary of the Company (“PMHH”), announced the Offer (the “Offer Announcement”) at a price of SEK 106 in cash per share, implying a value of approximately SEK 161 billion, or $16 billion using the exchange rate at the time of the Offer Announcement. 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.
The board of directors of Swedish Match has resolved to recommend that the shareholders of Swedish Match accept the Offer. The acceptance period for the Offer for shares of Swedish Match has not commenced. An offer document regarding the Offer is expected to be made public on or around June 22, 2022. The acceptance period in the Offer is expected to commence on or around June 23, 2022 and expire on or around September 30, 2022. However, PMHH reserves the right to extend the acceptance period and, to the extent necessary and permissible, will do so in order for the acceptance period to cover applicable decision-making procedures at relevant authorities. PMHH also reserves the right to postpone the settlement date. PMHH will announce any extension of the acceptance period and/or postponement of the settlement date by a press release in accordance with applicable laws and regulations. The Company expects that the Offer will close by the fourth quarter of 2022.
The completion of the Offer is subject to certain customary closing conditions for an offer governed by Nasdaq Stockholm’s Takeover Rules and the Takeover Act of Sweden (collectively, the “Takeover Rules”), including holders of at least 90% of the outstanding Swedish Match shares (on a fully diluted basis) tendering their shares into the Offer (the “Minimum Tender Condition”) and receipt of all necessary regulatory, governmental or similar clearances, approvals and decisions, including from competition authorities. PMHH reserves the right to withdraw the Offer in the event it becomes clear that any of the conditions to the Offer are not satisfied or cannot be satisfied. Other than with respect to the Minimum Tender Condition, however, such withdrawal will only be permitted if the non-satisfaction of such condition is of material importance to the proposed transaction. PMHH also reserves the right to waive, in whole or in part, any of the conditions to the Offer, including, with respect to the Minimum Tender Condition, to complete the Offer at a lower level of acceptance.
As soon as practicable after the Minimum Tender Condition has been satisfied and in compliance with the Takeover Rules, PMHH intends to commence compulsory redemption proceedings under the Swedish Companies Act to acquire all remaining shares in Swedish Match. In connection therewith, PMHH intends to delist Swedish Match’s shares from Nasdaq Stockholm.
The Takeover Rules and the Swedish Securities Council’s statements and rulings regarding interpretation and application of the Takeover Rules are applicable to the Offer.
The foregoing summary of the Offer Announcement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Offer Announcement. A copy of the Offer Announcement is attached hereto as Exhibit 99.3 and is incorporated herein by reference.
No Offer or Solicitation
This document is provided for informational purposes only and does not constitute an offer to sell, or an invitation to subscribe for, purchase or exchange, any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this document in any jurisdiction in contravention of applicable law.
Cautionary Statement Concerning Forward-Looking Statements
This document contains statements relating to future status or circumstances, including statements regarding the success of the acquisition, future performance, growth and other trend projections and other benefits of the acquisition, 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. 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 the Company. Examples of forward-looking statements include, but are not limited to, statements made about the proposed transaction. Any forward-looking statements speak only as of the date on which they are made and the Company has no obligation (and undertakes 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.
The Company’s business risks include: excise tax increases and discriminatory tax structures; increasing marketing and regulatory restrictions that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products in certain markets or countries; health concerns relating to the use of tobacco and other nicotine-containing products and exposure to environmental tobacco smoke; litigation related to tobacco use and intellectual property; intense competition; the effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; the impact and consequences of Russia’s invasion of Ukraine; changes in adult smoker behavior; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to repatriate funds; adverse changes in applicable corporate tax laws; adverse changes in the cost, availability, and quality of tobacco and other agricultural products and raw materials, as well as components and materials for our electronic devices; and the integrity of its information systems and effectiveness of its data privacy policies. The Company’s future profitability may also be adversely affected should it be unsuccessful in its attempts to produce and commercialize reduced-risk products or if regulation or taxation do not differentiate between such products and cigarettes; if it is unable to successfully introduce new products, promote brand equity, enter new markets or improve its margins through increased prices and productivity gains; if it is unable to expand its brand portfolio internally or through acquisitions and the development of strategic business relationships; or if it is unable to attract and retain the best global talent, including women or diverse candidates. Future results are also subject to the lower predictability of our reduced risk product category’s performance.
In addition, important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties related to: the possibility that expected benefits related to recent or pending acquisitions, including the proposed transaction, may not materialize as expected; the proposed transaction not being timely completed, if completed at all; regulatory approvals required for the transaction not being timely obtained, if obtained at all, or being obtained subject to conditions; prior to the completion of the transaction, Swedish Match’s business experiencing disruptions due to transaction-related uncertainty or other factors, including issues relating to maintaining relationships with employees, customers, licensees, other business partners or governmental entities; difficulty retaining key employees; the outcome of any legal proceedings related to the proposed transaction; and the parties being unable to successfully implement integration strategies or to achieve expected synergies and operating efficiencies within the expected time-frames or at all.
The Company is further subject to other risks detailed from time to time in its publicly filed documents, including the Form 10-K for the year ended December 31, 2021, and the Form 10-Q for the quarter ended March 31, 2022. The Company cautions that the foregoing list of important factors is not a complete discussion of all potential risks and uncertainties. The Company does not undertake to update any forward-looking statement that we may make from time to time, except in the normal course of its public disclosure obligations.