The American tobacco giant Philip Morris has agreed to purchase Vectura for one billion pounds ($1.40 billion). The British company specializes in medical inhalers for treating smoking-related diseases.
According to a statement on the London Stock Exchange’s website, the company is developing “products outside of tobacco and nicotine as part of a natural evolution towards health and wellness.” In February, the company announced its goal of selling at least $1 billion in nicotine-free products by 2025, and “has identified medicine inhalers as a priority.”
The tobacco giant says its goal is to “challenge its traditional business of producing and selling cigarettes and accelerate the end of smoking.” “It’s like a poacher being the protector of the animals in this deal,” said AJ Bell analyst Russ Mould.
Philip Morris “seems to want to use its expertise in inhalation for a positive purpose,” he continues. Vectura shareholders may be attracted to the cash offer but repelled by ethical or social issues and end up with a cigarette manufacturer instead of a company that promotes health.
In some countries, such as Japan, Philip Morris executives said tobacco sales could cease within “10 to 15 years.” However, the group does not anticipate the disappearance of tobacco, but rather advocates the development of alternatives that may be less harmful, such as smoking tobacco, which is consumed without combustion and without paper, unlike traditional cigarettes.
Electronic cigarettes and heated tobacco still have a poor reputation when it comes to health. Although they contain fewer toxic substances, they still contain nicotine, which causes addiction. The consortium led by Carlyle fund, which made an initial offer before Philip Morris bid, said Friday that it was evaluating its options.
According to Mold, British companies have become “prime prey” for foreign predators. Some commentators and media outlets point to Brexit and the pandemic as contributing factors to their vulnerability to foreign takeovers.