Tobacco giants Philip Morris International and Marlboro-maker Altria are in talks to re-unite, more than a decade after the two firms separated.
With Philip Morris worth some $120 billion and Altria $88 billion, a deal would create a $200 million-plus industry powerhouse.
The news hit the share prices of cigarette competitors, with British American Tobacco down 3 percent.
Altria, the biggest investor in e-cigarette market leader Juul Labs, spun off the Philip Morris business in 2008.
The companies’ confirmation of the talks came a day after Wells Fargo analyst Bonnie Herzog said Juul, 35 percent-owned by Altria, would have an ideal partner for its international expansion in Philip Morris. Juul is investing in overseas growth at a time when it faces increased regulatory scrutiny over the health of its products in the US.
Altria separated Philip Morris International (PMI) in a move aimed at unlocking the value of the business. Both make Marlboro cigarettes, the world’s best selling cigarette – Altria in the US and PMI in the rest of world.
PMI also makes the Parliament and Virginia brands, and has its own e-cigarette division which the company says on its website will eventually replace traditional tobacco.
Analysts said the rationale behind the deal was to face up to declining cigarette sales. Altria has diversified in recent years beyond traditional tobacco, taking stakes in wine, beer and cannabis companies, as well as Juul.—BBC