LONDON (ShareCast) - (Sharecast News) - Shares in Swedish Match sparked on Tuesday after it emerged the owner of Snus was in talks with Philip Morris International about a potential $16bn takeover.
In a statement released late on Monday, in response to a report in the Wall Street Journal, the US tobacco company confirmed talks were ongoing, though it cautioned it remained "uncertain" whether an offer would be made.

It also did not disclose terms. According to multiple media reports, however, a price tag of around $16bn including debt is being discussed.

Swedish Match also confirmed the talks, adding that there was no certainty a bid would be made "nor as to the terms of any such potential offer".

The talks are PMI's biggest since moves to reunite with its former parent Altria in 2019 fell apart. PMI, which is seeking to expand its range of smoke-free products, was formed when Altria spun out its international business in 2008.

Shares in Swedish Match surged as trading got underway on Tuesday, and by 1030 BST were up 24%, giving it a market value of around SEK 151.6bn ($15bn).

Shares in the owner of Marlboro outside of America closed 1% higher on Monday but were flat in pre-market trading on Tuesday.

Steve Clayton, select fund manager at Hargreaves Lansdown, said: "Philip Morris is looking to diversify further away from traditional tobacco profits. Swedish Match has long focused on smokeless tobacco products, ranging from Snus - a snuff-like product popular in Scandinavia - to oral nicotine products far removed from traditional chewing tobacco."

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