When news of the merger broke, Philip Morris International's share price fell by 7.8%
Altria, which makes Marlboros, span off its non-American business, Philip Morris International . The split was driven partly by Altria’s share price, which had been languishing below its sum-of-parts value, but also by regulatory hounding of Big Tobacco over its role in causing cancer. When British American Tobacco made a bid for Reynolds American, maker of Camels, in 2016, Bonnie Herzog, an analyst at Wells Fargo, a bank, urgedto reunite with its former parent. It took longer than expected.
Ms Herzog still thinks the merger makes sense, given the benefits of scale and geographical reach in what she calls the “global arms race” for “reduced-risk” products, which use fewer harmful chemicals. Last year Altria spent $12.8bn on 35% of Juul Labs, a maker of popular high-nicotine vaporisers. It paid $1.8bn for 45% of Cronos Group, a cannabis company from Canada ., a smoke-free device which heats tobacco and is expected to represent 40% of its sales by 2025, up from 14% last year.
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