Altria Group, Inc. has announced that merger discussions with Philip Morris International Inc. have ended. The two companies split after 2008 with Philip Morris International focusing on international markets and Altria focusing on building its business domestically.
Talks of a possible merger came out toward the end of August [read more here]. Had the companies reunited, the new combined company would have had an estimated market value of more than $200 billion, according to Reuters. Many analysts had predicted a merger would occur based on changes in the tobacco industry, including the decline of traditional combustible tobacco products like cigarettes in the U.S. and around the world. Both companies have focused on harm reduction and smoking alternatives to combat declining sales, with Altria investing in both the vapor and cannabis categories and Philip Morris finding some success with heat-not-burn.
“While we believed the creation of a new merged company had the potential to create incremental revenue and cost synergies, we could not reach agreement,” said Howard Willard, Altria’s Chairman and CEO, in a press release. “We look forward to continuing our commercialization of IQOS in the U.S. under our existing arrangement.”