Philip Morris to Buy Rest of Mexican Unit

Bloomberg May 21 2013
Philip Morris International Inc. agreed to acquire the remaining 20 percent stake in its Mexican tobacco business from billionaire Carlos Slim’s Grupo Carso SAB for about $700 million. The deal, which the companies expect to complete by Sept. 30, will add to earnings per share in the fourth quarter, New York-based Philip Morris said today in a statement. The final purchase price will be determined by a pre-agreed formula that is subject to adjustment by the target’s performance.
Chief Executive Officer Andre Calantzopoulos, who took over from Louis Camilleri earlier this month, is developing new products and expanding in emerging markets after Philip Morris’s share of global tobacco sales rose to a record 28.8 percent last year, excluding the U.S. and China.
“The Mexican market is attractive,” Jack Russo, an analyst for Edward Jones & Co. in St. Louis, said by telephone. “They can go out and acquire other businesses. While they take on debt to do that, interest rates are very low now and these businesses generate a lot of cash so they can pay off the debt quickly.”
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