PMI to go ahead with Swedish Match takeover despite falling short in shareholder approval

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A Swedish Match concept store for the tobacco group's moist powder tobacco "snus" in Stockholm, Sweden October 24, 2018. REUTERS/Anna Ringstrom/File Photo

Philip Morris International (PMI) said on Monday it was going ahead with its $16 billion (£14bn) plan to buy Swedish Match despite winning accept from owners with no more than 82.59 per cent of shares in the Swedish peer.

By Swedish law a bidder can only initiate a compulsory redemption of remaining shares if voluntary acceptance is above 90%. PMI had said earlier it could drop the bid if acceptance was lower.

“This achievement of a high controlling stake should allow us to harness the strategic potential of the transaction, including anticipated revenue synergies,” PMI chief executive OJacek Olczak said in a statement.

PMI in May made an offer to buy Swedish Match for 106 crowns per share, valuing the company at $16 billion. In October it raised the bid to 116 crowns per share after some investors said it was too low.

“We look forward to welcoming Swedish Match’s employees and leading oral nicotine portfolio into the PMI family,” the firm said.

PMI said it believed the ten largest shareholders of the Swedish group had accepted its bid and that the offer to buy shares would be extended until Nov. 25 in the hope of further raising its stake.

“Our objective is to delist the shares of Swedish Match from the stock market after reaching an ownership of more than 90 per cent; we therefore encourage remaining retail and other institutional shareholders to tender in the extended time,” PMI said.