Philip Morris to spend 15 billion on Swedish tobacco

Smoking is out, but tobacco remains. Cigarette manufacturer Philip Morris is in takeover talks with Swedish Match, a manufacturer of smokeless tobacco products. The deal could be worth 15 billion dollars.

Towards smokeless tobacco

Philip Morris International has promised to stop selling cigarettes in the long term. While this is an ambitious goal, it does not mean that the tobacco giant is giving up smoking. On the contrary, the company is looking at all sorts of ways to continue to provide people with their nicotine fix, but without the smoke.

It started with vaping, but now chewing tobacco and nicotine sachets are making their appearance too. Since 2008, Philip Morris has already invested 9 billion dollars in alternatives to cigarettes, and by 2025, half of its revenues are expected to come from smokeless tobacco products. Last year, smokeless products would already account for 29 % of PMI’s 31.6 billion dollars (30 billion euros) in sales, according to Forbes.

Now the company has its eye on Swedish Match. The manufacturer mainly produces ‘snus’, a typically Swedish variant of nicotine pouches, branded as General and ZYN. The pouches contain moist tobacco powder that people press against their gums, under their upper lip. ZYN is also innovating with synthetic nicotine, not made from tobacco.

Takeover negotiations are still ongoing and a deal is not yet certain, Forbes warns. The product is not without controversy, however: with the exception of Sweden, snus is banned in Europe, and there are calls for a ban on nicotine pouches containing synthetic tobacco as well.