(AFP) – Jul 31, 2008
NEW YORK (AFP) — Philip Morris International said Thursday it has struck a friendly matchup with Canadian tobacco company Rothmans Inc. in a two billion Canadian dollar (1.9 billion) takeover deal.
PMI, the global cigarette maker and distributor of leading brand Marlboro, already owns a 40 percent stake in Rothmans, Benson & Hedges (RBH).
Rothmans Inc.'s sole holding is its 60 percent interest in RBH, whose brands include Rothmans, Benson & Hedges, Craven A and Belmont.
PMI and Rothmans have been joint shareholders of RBH since 1986.
The takeover offer of 30 Canadian dollars per share represents a 14 percent premium to Rothmans's closing share price Wednesday, PMI said in a statement.
The New York-based company said the agreement and related offer had "the full support" of the Rothmans board of directors.
"This proposed acquisition is a win-win for both Rothmans and PMI shareholders," said Louis Camilleri, chairman and chief executive of PMI.
"Rothmans shareholders will receive a significant cash premium and PMI consolidates its presence in a market that we deem financially attractive and of strategic importance going forward."
PMI said it had agreed to make the offer following Rothmans's and RBH's finalization of a 550 million Canadian dollar settlement with the government of Canada and all 10 provinces, announced separately Thursday by Rothmans.
The settlement resolves the Royal Canadian Mounted Police's investigation relating to tobacco products exported from Canada by RBH during the 1989-1996 period.
RBH has agreed to plea guilty to a single count of violating a provision of Canada's excise law, Rothmans said in a separate statement.
PMI, which was spun off in March by US tobacco giant Altria, has a broad range of brands including Philip Morris, Chesterfield, Parliament, and Virginia Slims. Its products are sold in more than 160 countries.
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