Tobacco

Big Tobacco’s smoke-free rush may soon burn out

15 Dec 2023

British American Tobacco and Philip Morris International want fast-growing, smokeless products like vapes to offset stagnant sales of normal tobacco. Yet countries from Australia to the UK are clamping down on the $90 bln market. Rich valuations leave little room for error.

Capital Calls: BAT writedown

6 Dec 2023

Concise views on global finance: The $65 bln maker of Lucky Strike cigarettes unveiled a plan for a ‘smokeless’ world, but it’s in no hurry to build it.

Ohio’s weed embrace faces federal buzzkill

9 Nov 2023

Buckeye State voters backed legal recreational cannabis, bringing nearly half the country on board. More Americans now smoke weed than cigarettes, yet the industry’s market value is dwarfed by tobacco’s. National legal roadblocks and hazy growth prospects cloud the path forward.

Tidy-up puts $70 bln tobacco giant in good company

26 Jul 2023

India’s ITC is spinning off its hotels business but keeping a 40% stake. It’s a partial break from the firm that counts British American Tobacco as its top owner. Yet it may be the best way to close a valuation gap with its Tata-backed rival and fully cash in on a tourism boom.

How PMI reinvented the Big Tobacco investment case

6 Jun 2023

Cigarette makers traditionally promise low growth but hefty shareholder payouts. The $140 bln Marlboro producer, though, stopped buybacks and invested in smoke-free alternatives. To emulate its premium valuation, rivals Altria and BAT may have to ditch the industry playbook too.

Capital Calls: Plan C for Teck Resources

26 Apr 2023

Concise views on global finance: The Canadian miner withdrew a shareholder vote to split coal from copper as it looked set to fail. If a promised “simpler” breakup plan also falls short, the $24 bln takeover bid from Glencore may become more appealing.

Philip Morris and Rio’s poker faces need some work

7 Nov 2022

The $139 bln Marlboro maker and $95 bln miner have upped buyout offers to try and clinch strategically key deals. In both cases, hedge funds and minority investors called their bluff. The lesson is that bidders can’t play hardball if everybody knows they really need a deal.

Capital Calls: Philip Morris/Swedish Match

20 Oct 2022

Concise views on global finance: The Marlboro maker has raised its already pricey $16 bln offer for the Swedish seller of nicotine pouches.

Capital Calls: T-Mobile US transmits clear signal

9 Sep 2022

Concise views on global finance: The telecom carrier is planning a $14 bln buyback program as it beats rivals in shareholder return.

Capital Calls: LVMH succession, Swedish Match

22 Jul 2022

Concise views on global finance: Bernard Arnault insures the luxury group against future family feuds; the oral tobacco company’s results will embolden deal resisters.

Capital Calls: Swedish Match, FCA

8 Jul 2022

Concise views on global finance: Elliott’s stake-building in Swedish Match may delay Philip Morris’s takeover of the oral tobacco company; the Hong Kong brain drain gathers pace with Ashley Alder’s move to Britain’s financial regulator.

Altria begins to look like tobacco’s bad bank

22 Jun 2022

The Marlboro-maker’s value fell by around $7 billion over a U.S. crackdown on nicotine and potential ban for e-cigarette partner Juul. Altria is starting to look like the riskiest parts of the tobacco industry, rolled up into a single bundle.

Reinvention tops returns in Philip Morris snus bet

11 May 2022

The tobacco giant has agreed a $16 bln takeover of nicotine pouch maker Swedish Match. The deal brings it closer to being mostly smoke-free by 2025. But only rapid growth or big cost cuts can justify the 39% premium. CEO Jacek Olczak has scant room for legal or regulatory snafus.

Philip Morris’ snus deal looks doubly defensive

9 May 2022

The U.S. cigarette maker could beat a faster path to becoming a mostly smoke-free company if it snags the $12 bln Swedish Match and its chewable tobacco packs. A tie-up would be pricy, but investors’ growing yen for recession-proof stocks gives the Marlboro Man an added edge.

Inflation gives Big Tobacco a handy drag

11 Feb 2022

High cigarette taxes shield their makers from the pain of soaring input costs. Customers who can’t say no also make hiking prices easier. But long-term survival relies on solid smoke-free plans. In that race, $102 bln BAT is playing catch-up to $164 bln rival Philip Morris.

The Exchange: Breakingviews at Reuters Next

9 Dec 2021

At the global conference, our columnists interviewed the movers and shakers at Ola Electric, Philip Morris, ViacomCBS and Klarna about disruption at scale in India, the challenges of making bold corporate transitions in tobacco and media, and Europe’s fintech frenzy.

Viewsroom: Breaking up Ant, smokes and flavors

16 Sep 2021

Beijing’s crackdown on Jack Ma’s fintech giant continues, but there may be some silver linings to the latest wrinkle, Robyn Mak tells Pete Sweeney. Meantime Dasha Afanasieva explains what a cigar spinoff at Swedish Match and carveouts at Royal DSM have in common.

Cigarless Swedish Match has pull for Marlboro Man

15 Sep 2021

The $15 bln oral tobacco maker is spinning off its stogies to quit the combustion business. With its ambitious smoke-free revenue targets, Philip Morris may be keen on what’s left. Judging by its pumped-up takeover of inhaler firm Vectura, it may take the hit, however pricey.

Capital Calls: Cook defeats Apple crumble risk

24 Aug 2021

Concise views on global finance: The CEO replaced the ailing Steve Jobs exactly 10 years ago. Despite fears at the time, Cook’s must be one of the most lucrative successions of all time for shareholders.

Vectura tussle chips away at money’s winning might

13 Aug 2021

The inhaler maker endorsed a bid from Philip Morris that was 6% above one from Carlyle. Juicier shareholder returns and deeper pockets to invest prevailed over distaste for Big Tobacco. But the noisy debate makes scrutinising deals on broader stakeholder grounds look more normal.