Philip Morris International Inc. announces today its entry into a definitive agreement to acquire 49% of the shares of United Arab Emirates-based Arab Investors-TA for $625 million.
Through its acquisition of 49% of the shares of AITA, PMI will secure an almost 25% economic interest in the Société des Tabacs Algéro-Emiratie (STAEM), a joint venture which is 51% owned by AITA and 49% by the Algerian state-owned Société Nationale des Tabacs et Allumettes SpA, the market leader.
STAEM, with which PMI has had a successful partnership since 2005, manufactures and distributes under license PMI’s Marlboro and L&M brands, which together hold a significant share of the international trademarks sold in Algeria, placing PMI’s brand portfolio as the second largest in the market. This equity investment in AITA will provide PMI with enhanced earnings from Algeria and is projected to be accretive to PMI’s earnings per share as of 2014.
“With the fourth largest total GDP in Africa, and an estimated cigarette market of 30 billion units, Algeria holds tremendous potential for future growth,” said Miroslaw Zielinski, PMI’s President, Eastern Europe, Middle East & Africa Region and PMI Duty Free.
“This agreement confirms our confidence in the Algerian economy, the cigarette industry and their long-term prospects. Over the last five years, Algeria has been a key driver of the growth of our premium brands in North Africa and the investment we are announcing today will significantly enhance our prospects in the country. Our new partnership with the UAE-based investors from whom we are acquiring the 49% interest in AITA also opens additional business opportunities in Egypt and certain other North African and Middle Eastern markets where there is potential for further expansion.”
About Philip Morris International Inc.
Philip Morris International Inc. (PMI) is the leading international tobacco company, with seven of the world’s top 15 international brands, including Marlboro, the number one cigarette brand worldwide. PMI’s products are sold in more than 180 markets. In 2012, the company held an estimated 16.3% share of the total international cigarette market outside of the U.S., or 28.8% excluding the People’s Republic of China and the U.S.
Source: PMI Press release.
