Philip Morris International Inc. (PM) agreed to buy an interest of 49% in Arab Investors for $625 million. The acquisition will help the tobacco company to consolidate its presence on Algerian tobacco market.
The famous manufacturer of Marlboro and L&M cigarettes has been looking the ways to increase its presence in emerging markets because these days cigarette sales volumes are lowering in many developed countries worldwide.
In May 2013, the Philip Morris International agreed to acquire Grupo Carso SAB’s 20% interest in Mexico for $700 million, which gave the company total ownership of its Mexican unit.
The latest deal will give Philip Morris almost 25% interest in the Societe des Tabacs Algero-Emiratie, a mixed enterprise between Algerian state-owned Societe Nationale des Tabacs et Allumettes SpA and United Arab Emirates-based Arab Investors-TA and
Miroslaw Zielinski, president of Philip Morris’s Eastern Europe, Middle East and Africa region and PMI duty free business, said that Algeria has a wonderful potential for future growth with the fourth-largest total gross domestic product in Africa, and an estimated cigarette market of 30 billion units.
Philip Morris collaborates with the mixed enterprise since 2005. The venture produces and distributes under license Philip Morris’s such cigarettes brands as Marlboro and L&M, which together hold a large share of the international brands that are sold in Algeria and this places brands by Philip Morris in top three in the country.
Besides this, Zielinski added that over the last 5 years, Algeria has been an important driver of the growth of company;s premium brands in North Africa and the investment will significantly enhance PM prospects in the country.