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British officials reportedly monitoring Philip Morris’ proposed acquisition of Vectura

PMI, which owns a portfolio of tobacco products, announced a deal to acquire Vectura for £927m earlier this week

British officials are reportedly monitoring tobacco company Philip Morris International’s (PMI) proposed acquisition of inhaled-drug company Vectura, according to The Times.

PMI, which owns a portfolio of tobacco products including Marlboro, announced a deal to acquire UK-headquartered Vectura for £927m ($1.2bn) earlier this week.

Vectura, which is developing inhaled drug delivery solutions for a number of diseases – including COVID-19 – previously received another acquisition offer from private equity group Carlyle in May.

However, the company’s board has withdrawn support for the Carlyle offer after receiving the higher offer from PMI.

“We recognise the material increase in the price offered to shareholders under the acquisition when compared with the Carlyle offer and have accordingly recommended the acquisition to shareholders,” said Bruno Angelici, chairman of Vectura.

According to The Times, Britain’s secretary of state for business, energy and industrial strategy Kwasi Kwarteng has asked officials to monitor the deal to ‘better understand’ PMI’s plans for Vectura.

There is reportedly some unease within the government relating to the takeover, with some raising concerns that PMI is planning to acquire a firm that is developing therapies to treat some of the conditions caused by the very tobacco products it sells.

The Labour party’s shadow health secretary Ed Miliband urged Kwarteng and UK health and social care secretary Sajid Javid to publicly review PMI’s plans for Vectura, to ensure “the future of this vital company is not in any way at risk”.

The Vectura/PMI deal has also faced criticism from medical research charities and anti-smoking groups, reported The Times.

Beyond its tobacco portfolio, PMI announced earlier this year that it is aiming to generate over 50% of its total net revenue from smoke-free products by 2025 as part of its ‘Beyond Nicotine’ strategy.

The company is also aiming to generate at least $1bn in net revenues by 2025 from its ‘beyond nicotine’ products.

PMI recently announced an agreement to acquire Fertin Pharma, a developer of pharmaceutical and well-being products based on oral and intra-oral delivery systems.

Fertin Pharma marks another move beyond its core tobacco products for PMI, with its portfolio of nicotine gums, pouches and liquefiable tablets.

Article by
Lucy Parsons

15th July 2021

From: Regulatory



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