Philip Morris International, the owner of the Marlboro and L&M cigarette brands, has announced the sale of its British company. This would be nothing out of the ordinary, if not for the fact that the company being sold is Vectura Group, which produces inhalers for the treatment of lung diseases (cynical, isn’t it?). The tobacco giant sold the British company at a low price because of the “unjustified” criticism that accompanied the deal.
Philip Morris International (PMI) is an American tobacco giant that owns, among others, such brands as L&M and Marlboro. The company has just announced the sale of Vectura Group for £150 million, just three years after PMI bought it for £1 billion. At the time, the decision was criticized for its hypocrisy. Vectura produces inhalers used to treat lung diseases such as asthma.
PMI has defended the move as part of its strategy to move away from cigarettes and toward “smoke-free” businesses such as IQOS.
“Freedom from (…) the unjustified burden of restrictions and criticism”
On Wednesday, PMI announced the sale of Vectura to Molex Asia Holdings, saying it frees the company, which was recently under its ownership, “from the undue burden of external constraints and criticism associated with our ownership.”
The BBC reports that the deal, which is still subject to regulatory approval, will involve Molex paying an upfront fee of £150 million and “potential deferred payments of up to £148 million” if certain conditions are met.
PMI CEO Jacek Olczak also said that the company remains “committed to innovation in the sector in the long term,” suggesting that it is not completely exiting the inhaler sector.
Ambitious PMI plans
The acquisition of Vectura was part of PMI’s commitment to a “smoke-free world.” PMI claims that by 2030, two-thirds of its sales will come from products other than classic cigarettes.
However, as noted by the BBC, health charities have expressed skepticism about the sincerity of PMI’s promises, given the billions of pounds the company still earns from cigarette sales.
The most recent financial results for the three months to the end of June showed that more than 60 percent of the $9.47 billion in revenue came from cigarettes.
During this period, Philip Morris International accounted for 23.6 percent. of the global cigarette market in terms of revenue.