Philip Morris International — the manufacturer of Marlboro cigarettes for the United Kingdom — is attempting to purchase Vectura, a pharmaceutical company that produces asthma inhalers.
In order to parry another buyout offer from American private equity firm Carlyle, Philip Morris International increased its bid to $2.29 per share, giving Vectura a $1.4 billion valuation.
CNN Business explains that the move is Philip Morris International’s latest in response to heightened global regulations:
Tobacco companies are under pressure to diversify amid dwindling smoker numbers, a push from governments to reduce the prevalence and dangers of smoking, and moves by investors to strip tobacco products from their portfolios.
Philip Morris International has invested $8 billion and hired dozens of scientists and technicians to develop alternatives to cigarettes, including its flagship IQOS product, which heats rather than burns tobacco. The company also recently bought Fertin Pharma, which manufactures oral drSnougs to treat pain, allergies and various other ailments.
CNN Business notes that health activists are concerned about the deal. As Cancer Research UK chief executive Michelle Mitchell said, “it’s ironic that a tobacco company wants to invest in the lung health industry when their products are the biggest preventable cause of cancer, including lung cancer.”
Philip Morris International — a distinct spinoff from Philip Morris USA, which sells cigarettes in the United States — is therefore seeking to rebrand.
“We can stand still and continue selling cigarettes or we can do something with the science and the technology at least to significantly reduce the harm created by smoking,” CEO Jacek Olczak told CNBC last month. “I believe what we’re doing is absolutely right… Nothing and nobody will stop us in our transformations to leave smoking behind.”
In the United States, the Biden administration is seeking to tighten regulations on menthol cigarettes — a move that the ACLU believes will “disproportionately impact people and communities of color, trigger criminal penalties, and lead to negative interactions with law enforcement.”
“Banning menthol — the last allowable flavor — in cigarettes and banning all flavors in cigars will help save lives, particularly among those disproportionately affected by these deadly products,” explained Acting FDA Commissioner Janet Woodcock in a statement. “With these actions, the FDA will help significantly reduce youth initiation, increase the chances of smoking cessation among current smokers, and address health disparities experienced by communities of color, low-income populations, and LGBTQ+ individuals, all of whom are far more likely to use these tobacco products.”