Philip Morris Holland Holdings B.V., an Affiliate of Philip Morris International Inc., Announces a Recommended Cash Offer of SEK 106 Per Share to the Shareholders of Swedish Match AB
BERGEN OP ZOOM,
This announcement is not an offer, whether directly or indirectly, in
The shareholders of Swedish Match are offered
SEK 106in cash per share in Swedish Match.3
The total value of the Offer amounts to approximately
SEK 161.2 billion, corresponding to approximately USD 16.0 billion4.
The price offered for the shares represents a premium of 39.4 percent compared to the closing share price of
SEK 76.06on May 9, 2022; 39.7 percent compared to the volume-weighted average trading price of SEK 75.86during the last 30 trading days ended on May 9, 2022; and 46.6 percent compared to the volume-weighted average trading price of SEK 72.33during the last 90 trading days ended on May 9, 2022.
- The board of directors of Swedish Match recommends that Swedish Match's shareholders accept the Offer. The recommendation is supported by a fairness opinion provided by SEB Corporate Finance, Skandinaviska Enskilda Banken AB (publ) ("SEB Corporate Finance").
An offer document regarding the Offer is expected to be made public on or around
June 22, 2022. The acceptance period in the Offer is expected to commence on or around June 23, 2022and expire on or around September 30, 2022.
- The Offer is conditional upon the Offer being accepted to such extent that PMHH becomes the owner of shares representing more than 90 percent of the total number of outstanding shares in Swedish Match (on a fully diluted basis). Further, the Offer will be made on the terms and subject to the conditions 2 – 7 set out below in this announcement.
"We are pleased to announce this exciting next step in
Background and reasons for the Offer
In 2016, PMI announced its new mission to replace cigarettes with science-based, less harmful alternatives as soon as possible—to the benefit of people who smoke, public health, PMI, and society. The proof of PMI's commitment to this mission and strong progress to date is undeniable: In 2015, essentially all of PMI's net revenues came from cigarettes. In 2021, nearly 30 percent came from smoke-free products. By 2025, PMI aims to be a predominantly smoke-free company, with more than half of its net revenues coming from such products.
While cigarettes represent PMI's past and are part of its present, they do not represent its future. Since 2008, PMI has invested more than
PMI and Swedish Match share a mutual vision of a world without cigarettes and a strong commitment to developing, scientifically substantiating, and responsibly commercializing smoke-free products that are less harmful than cigarettes. PMI values how Swedish Match has relentlessly pursued tobacco harm reduction through its range of smoke-free products; received authorizations for its products via strict regulatory pathways in the
As PMI continues to evolve its business for the long term, it believes that the two companies would be a perfect pairing of strategic vision, culture, and enterprise. Together, the companies would be able to create a global, science-led smoke-free champion, combining expertise in heated tobacco and oral nicotine—including multiple MRTP authorizations—as well as PMI's emerging presence in e-vapor products, to switch more adult smokers to better alternatives than the two could achieve as separate companies. Swedish Match would lead the combined company’s oral nicotine business.
The combination with Swedish Match would position PMI to:
- create a comprehensive smoke-free product portfolio globally, underpinned by a leading R&D engine for science, innovation, and growth through the companies' complementary capabilities;
directly enter and compete in the large, attractive and growing
U.S.smoke-free market by: (i) further supporting and developing Swedish Match's oral nicotine portfolio in the U.S.and (ii) leveraging Swedish Match's substantial operational platform in the U.S.to unlock commercial opportunities across other smoke-free categories in the coming years; and
- drive accelerated global expansion opportunities for Swedish Match's oral nicotine products through PMI's international commercial infrastructure and financial resources.
Therefore, the combination would immediately enhance PMI's already strong growth profile and support additional opportunities in the
The transaction would result in a combined company with a strong balance sheet and leverage of approximately 3x net debt to adjusted EBITDA at closing, with deleveraging anticipated over the next few years. PMI would continue to target strong investment grade credit ratings over time, as a growing and highly cash-generative business. To support deleveraging, PMI has suspended its current three-year share repurchase program, which began in
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. PMI's current plans for the future business and general strategy, as described above, do not include any material changes with regard to Swedish Match's operational sites, or its management and employees, including their terms of employment. Swedish Match has a complementary organization with a talented, dedicated workforce, excellent culture and a strong base of skills in
The shareholders of Swedish Match are offered
American Depositary Shares representing the right to receive shares in Swedish Match in connection with unsponsored American Depositary Receipt programs are not included in the Offer.
If, prior to settlement of the Offer, Swedish Match (i) distributes dividends6 or (ii) in any other way distributes or transfers value to its shareholders, the consideration in the Offer will be reduced accordingly (the “Price Adjustment”). In such circumstances, PMHH may decide to apply such Price Adjustment or invoke condition 7 to completion of the Offer (see below).
No commission will be charged by PMHH in respect of the settlement of the Swedish Match shares tendered to PMHH under the Offer.
The price per share in the Offer represents a premium of7:
39.4 percent compared to the closing share price of
SEK 76.06on May 9, 2022(the last day of trading prior to market speculation regarding a potential public offer for the Company)8;
39.7 percent compared to the volume-weighted average trading price of
SEK 75.86for the shares during the last 30 trading days ended on May 9, 2022(the last day of trading prior to market speculation regarding a potential public offer for the Company)9; and
46.6 percent compared to the volume-weighted average trading price of
SEK 72.33for the shares during the last 90 trading days ended on May 9, 2022(the last day of trading prior to market speculation regarding a potential public offer for the Company)10.
Total value of the Offer
The total value of the Offer, based on all outstanding 1,520,714,190 shares11 in Swedish Match, amounts to approximately
Statement from the board of directors of Swedish Match and fairness opinion
The board of directors of Swedish Match has assessed the Offer and informed PMHH that the board of directors of Swedish Match has resolved to recommend that the shareholders of Swedish Match accept the Offer. The board of directors of Swedish Match has further informed PMHH that the board of directors of Swedish Match has obtained a fairness opinion from SEB Corporate Finance, according to which the Offer is fair for Swedish Match's shareholders from a financial perspective.
PMHH's shareholding in Swedish Match
Neither PMHH nor any closely related companies or closely related parties own any shares or other financial instruments in Swedish Match that give financial exposure to Swedish Match's shares at the time of this announcement, nor has PMHH or any closely related companies or closely related parties acquired or taken measures to acquire any shares in Swedish Match or any financial instruments that give financial exposure to Swedish Match's shares during the six months preceding this announcement.
To the extent permissible under applicable law or regulations,PMHH and its affiliates may acquire, or take measures to acquire, shares in Swedish Match in other ways than through the Offer. Information about such acquisitions of shares, or measures to acquire shares, will be disclosed in accordance with applicable laws and regulations.
Conditions for completion of the Offer
Completion of the Offer is conditional upon:
- the Offer being accepted to such extent that PMHH becomes the owner of shares representing more than 90 percent of the total number of outstanding shares in Swedish Match (on a fully diluted basis)13;
- no other party announcing an offer to acquire shares in Swedish Match on terms that are more favorable to the shareholders of Swedish Match than the Offer;
- with respect to the Offer and completion of the acquisition of Swedish Match, receipt of all necessary regulatory, governmental or similar clearances, approvals, decisions and other actions from authorities or similar, including from competition authorities, in each case on terms which, in PMHH's opinion, are acceptable;
- neither the Offer nor the acquisition of Swedish Match being rendered wholly or partially impossible or significantly impeded as a result of legislation or other regulation, any decision of a court or public authority, or any similar circumstance;
- no circumstances having occurred which could have a material adverse effect or could reasonably be expected to have a material adverse effect on Swedish Match's financial position, business or operation, including Swedish Match's sales, results, liquidity, equity ratio, equity or assets;
- no information made public by Swedish Match, or otherwise made available to PMHH by Swedish Match, being inaccurate, incomplete or misleading, and Swedish Match having made public all information which should have been made public; and
- Swedish Match not taking any action that is likely to impair the prerequisites for making or completing the Offer.
PMHH reserves the right to withdraw the Offer in the event that it is clear that any of the above conditions are not satisfied or cannot be satisfied. However, with regard to conditions 2 – 7 above, the Offer may only be withdrawn where the non-satisfaction of such condition is of material importance to PMHH's transaction with Swedish Match or if otherwise approved by the
PMHH reserves the right to waive, in whole or in part, one or more of the conditions set out above (including, with respect to condition 1 above, to complete the Offer at a lower level of acceptance).
Information about PMHH and PMI
PMHH is a Dutch private limited liability company (Besloten Vennootschap) with corporate registration number 20028955, with corporate seat and headquarters in Marconilaan 20, 4622RD, Bergen op Zoom,
PMI is a leading international tobacco company working to deliver a smoke-free future and evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. PMI's current product portfolio primarily consists of cigarettes and smoke-free products, including heat-not-burn, vapor and oral nicotine products, which are sold in markets outside the
PMI is an American corporation, incorporated in
Financing of the Offer
The consideration payable in respect of the Offer is fully secured by funds which PMI has undertaken to contribute, directly or indirectly, to PMHH. PMI's undertaking to contribute funds is fully secured by funds available to PMI pursuant to debt financing committed to be provided by Bank of America and
The above-mentioned undertaking from PMI and financing will provide PMHH with sufficient cash resources to satisfy in full the consideration payable in respect of the Offer and, accordingly, completion of the Offer is not subject to any financing condition.
Review of information in connection with the Offer
PMHH has been permitted by the board of directors of Swedish Match to carry out a limited confirmatory due diligence review of Swedish Match in connection with the preparation of the Offer. Except for the interim report for January –
Approvals from authorities
The completion of the Offer is conditional upon, inter alia, all necessary regulatory, governmental or similar clearances, approvals, decisions and other actions from authorities or similar, including from competition authorities being obtained, in each case on terms which, in PMHH's opinion, are acceptable.
According to PMHH's assessment, the transaction will require customary merger control approvals (and foreign direct investment approvals) including in the
Statement from the
AMN 2022:20 will be available in its entirety on the
Publication of the offer document
Commencement of settlement
PMHH reserves the right to extend the acceptance period and, to the extent necessary and permissible, will do so in order for the acceptance period to cover applicable decision-making procedures at relevant authorities. PMHH also reserves the right to postpone the settlement date. PMHH will announce any extension of the acceptance period and/or postponement of the settlement date by a press release in accordance with applicable laws and regulations.
Compulsory redemption proceedings and delisting
As soon as possible after PMHH has acquired shares representing more than 90 percent of the total number of shares in Swedish Match15, PMHH intends to commence compulsory redemption proceedings under the Swedish Companies Act (Sw. aktiebolagslagen (2005:551)) to acquire all remaining shares in Swedish Match. In connection therewith, PMHH intends to promote delisting of Swedish Match's shares from Nasdaq Stockholm.
Applicable law and disputes
The Offer, as well as any agreements entered into between PMHH and the shareholders in Swedish Match as a result of the Offer, shall be governed and construed in accordance with substantive Swedish law. Any dispute regarding the Offer, or which arises in connection therewith, shall be settled exclusively by Swedish courts, and the
The Takeover Rules and the
The board of directors
For additional information, please contact:
Lausanne: +41 (0)58 242 4666
Lausanne: +41 (0)58 242 4500
For administrative questions regarding the Offer, please contact your bank or the nominee registered as holder of your shares.
The information was submitted for publication on
Information about the Offer
This press release has been published in Swedish and English. In the event of any discrepancy in content between the two language versions, the Swedish version shall prevail.
This announcement is not an offer, whether directly or indirectly, in
The release, publication or distribution of this press release in or into jurisdictions other than
This announcement has been prepared for the purpose of complying with Swedish law, the Takeover Rules and the
Unless otherwise determined by PMHH or required by Swedish law, the Takeover Rules and the
The availability of the Offer to shareholders of Swedish Match who are not resident in and citizens of
The Offer and the information and documents contained in this press release are not being made and have not been approved by an authorised person for the purposes of section 21 of the
This press release contains statements relating to future status or circumstances, including statements regarding the success of the acquisition, future performance, growth and other trend projections and other benefits of the acquisition, that are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may generally, but not always, be identified by the use of words such as "anticipates", "intends", "expects", "believes", or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of PMI and PMHH. Any such forward-looking statements speak only as of the date on which they are made and PMI and PMHH have no obligation (and undertakes no such obligation) to update or revise any of them, whether as a result of new information, future events or otherwise, except for in accordance with applicable laws and regulations.
Special notice to shareholders in
The Offer described in this press release is made for the issued and outstanding shares of Swedish Match, a company incorporated under Swedish law, and is subject to Swedish disclosure and procedural requirements, which may be different from those of
Swedish Match's financial statements and all financial information included herein, or any other documents relating to the Offer, have been or will be prepared in accordance with IFRS and may not be comparable to the financial statements or financial information of companies in
The Offer, which is subject to Swedish law, is being made to the
It may be difficult for Swedish Match's shareholders to enforce their rights and any claims they may have arising under the
To the extent permissible under applicable law or regulations, PMHH and its affiliates or its brokers and its brokers' affiliates (acting as agents for PMHH or its affiliates, as applicable) may from time to time and during the pendency of the Offer, and other than pursuant to the Offer, directly or indirectly purchase or arrange to purchase shares of Swedish Match outside
The receipt of cash pursuant to the Offer by a
1 A Dutch private limited liability company (Besloten Vennootschap), with corporate registration number 20028955 and corporate seat in Bergen op Zoom,
2 Excluding any treasury shares held by Swedish Match (currently 4,285,810 shares).
3 Corresponding to approximately
4 Based on a USD/SEK exchange rate of 10.0564 as of
5 Corresponding to approximately
6 Including, for the avoidance of doubt, the resolved dividend payment of
7 Source for Swedish Match's share prices: Nasdaq Stockholm.
8 Representing a premium of 11.6 percent compared to the closing price of
9 Representing a premium of 31.7 percent compared to the volume-weighted average trading price of
10 Representing a premium of 43.4 percent compared to the volume-weighted average trading price of
11 Excluding any treasury shares held by Swedish Match (currently 4,285,810 shares).
12 Corresponding to approximately
13 Excluding any treasury shares held by Swedish Match (currently 4,285,810 shares).
14 All dates are preliminary and may be subject to change.
15 Excluding any treasury shares held by Swedish Match (currently 4,285,810 shares).
Lausanne: +41 (0)58 242 4666
Lausanne: +41 (0)58 242 4500