Marlboro maker Philip Morris takes control of asthma inhaler maker Vectura

·2-min read
Death: Eric Lawson in an advert for Marlboro cigarettes
Death: Eric Lawson in an advert for Marlboro cigarettes

Marlboro cigarette firm Philip Morris International (PMI) today sealed its controversial £1.1 billion takeover of asthma inhaler maker Vectura.

PMI has hoovered up a 29% stake in the health firm buying shares on the open market and received acceptances from another 45.6% to control of 74.8% of shares, it said today.

That is well above the 50% takeover threshold but just shy of the 75% required to delist Vectura from the London Stock Exchange.

The tobacco giant said: “All remaining conditions to the offer have been satisfied or, where applicable, waived. Accordingly… the offer has become unconditional in all respects.”

Hold-outs have been granted two weeks to accept the 165p-a-share bid.

If and when PMI has collected more than 90% of acceptances, minority shareholders will be obliged to fall into line in a squeeze-out.

PMI, which outbid US private equity firm Carlyle in a high-profile battle for control of the Chippenham-based medical manufacturer, said: “Shareholders who have not yet accepted the offer are urged to do so as soon as possible.”

CEO Jacek Olczak hailed the buy-up was “an important milestone” as the group diversifies away from cigarettes toward ‘wellness’ products.

That view is far from universal with the US tobacco giant’s bid sparking outcry among public health experts and medical charities.

Sarah Woolnough, the CEO of Asthma UK, today called on public health minister Jo Churchill to intervene.

Woolnough said: ““Vectura has sold out millions of people with lung disease, and instead prioritised short-term financial gain over the long-term viability of Vectura as a business.

“Vectura is now owned by a tobacco company, and this could cause considerable problems, such as the firm being excluded from research and clinical networks.

“It creates perverse incentives for Philip Morris International to sell more of its harmful products so they might then profit again through treating smoking-related diseases.

“We call on the Government to stand by its commitment to the World Health Organisation framework convention on tobacco control to prevent this happening.”

AJ Bell’s Danni Hewson said: “"Despite the ethical outcry, Vectura shareholders have succumbed to Big Tobacco’s big pockets.

"However good Phillip Morris’ intentions the bottom line is with this acquisition it’s playing both sides, making money from tobacco which makes people sick and inhalers which help them feel better.

“This takeover has been uncomfortable. It’s posed difficult questions and many people won’t like the answer that’s been delivered."

Major investors today maintained a public silence over the deal. Axa, TIG Advisors and Berry Street, who between them hold 11% per cent of Vectura’s shares, had previously given irrevocable undertakings of support for Carlyle's rival offer.

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