In a statement on Wednesday, Philip Morris International Inc said, it was making a cash offer to acquire Swedish tobacco and nicotine products maker Swedish Match for 106 Swedish crowns per share.
The value of the offer for Swedish Match, a Stockholm-listed company, amounted to approximately $16 billion (161.2 billion Swedish crowns), said the company in a statement.
With the news reaching the market on Tuesday, Swedish Match’ shares surged to a record high.
This acquisition sees Philip Morris betting on the fast growing market for cigarette alternatives.
While the bulk of its profit comes from a Swedish-style snuff called “snus”, sales of its Zyn tobacco-free nicotine pouches are also seeing rapid growth in Scandinavia and in the United States.
In a separate statement, Swedish Match’s board said, it believed “the terms of the offer recognise Swedish Match’s long-term growth prospects, taking into account the risks associated with the realisation of those prospects”.
($1 = 10.0381 Swedish crowns)