Philip Morris International (PMI) has made a reported $16 billion offer to buy Swedish Match, whose board of directors on Wednesday recommended the company accept the offer. A PMI spokesperson said their current plan does not include material changes — such as any that would affect the operation of the Swedish Match factory in Owensboro or its employees.
“If PMI’s offer for Swedish Match is successful, our plans for Swedish Match’s future business and general strategy do not currently include any material changes with regard to operational sites or the company’s management and employees,” PMI Director of U.S. Communications Corey Henry said in an email Wednesday morning when asked if Owensboro’s factory would be affected.
In a release from Swedish Match that included the board of directors’ recommendation to accept, PMI issued a similar statement.
“PMI recognizes that the employees and management team of Swedish Match have built a highly successful business with an excellent track record, and PMI has the utmost respect for them,” a statement from PMI reads in the release from Swedish Match. “… Swedish Match has a complementary organization with a talented, dedicated workforce, excellent culture and a strong base of skills in Sweden, the U.S. and across the world. PMI would intend to nurture this talent and provide additional opportunities as the companies grow together. Importantly, PMI intends to provide compensation and benefits consistent with Swedish Match’s current programs.”
The Swedish Match factory in Owensboro has long been a big contributor to the economic landscape, including a pair of major developments over the last few years.
In 2017, Swedish Match announced a $40.9 million investment for the Owensboro facility that was expected to create 36 jobs. That initial projection was more than doubled over the following two years to exceed $100 million in total investments.
Then in 2019, the Owensboro factory unveiled a $115 million expansion that was expected to add 120 jobs. The expansion focuses on Swedish Match’s ZYN nicotine pouches, which are only produced in Owensboro.
In a release Wednesday, the company said that it “is the market leader in the U.S. nicotine pouch category with its ZYN branded offering.” And in an earnings report Wednesday the company said “ZYN nicotine pouches in the US continued to gain market shares on a sequential basis and demonstrated solid sales and profit growth.”
Swedish Match has been working toward their vision of “A world without cigarettes,” and more than 65 percent of its sales are derived from smoke-free products. Their smoke-free portfolio includes snus, moist snuff, chewing tobacco and nicotine pouches. The company has no cigarettes in its portfolio.
Several national media outlets have reported that PMI’s offer to buy Swedish Match is a major effort to delve further into the smoke-free market.
The companies had been talking about a takeover, and PMI made public their cash offer on Wednesday morning.
According to the Associated Press, PMI is offering $10.62 for each share of Swedish Match, a premium of about 39% to its closing price Monday before the potential deal was first reported in The Wall Street Journal.
The acceptance period of the offer is expected to commence on June 23 and expire on Sept. 30, subject to any extensions. According to a PMI spokesperson, the completion of the offer is conditional upon various regulatory/government approvals, including in the U.S. and European Union.
According to the Associated Press, all of PMI’s revenue came from cigarettes in 2015, but last year about 30% of its revenue came from smoke-free products.
Officials in the human relations department at the Owensboro factory said they were not authorized to comment. A request for comment from Swedish Match Director of Public Relations was not returned by the time this article was published.