MANILA Feb 24 The Philippine unit of Philip
Morris International (PM.N) will merge with unlisted Fortune
Tobacco Corp, giving it access to the lower-priced cigarette
market, an industry source said on Wednesday.
Philip Morris Philippines Manufacturing Inc and Fortune
Tobacco have a combined share of about 90 percent of the local
Fortune is owned by one of the country's richest men Lucio
The merged company will be called PMFTC, with Philip Morris
acquiring a slim majority control of the new firm, the source,
who asked not to be identified for lack of authority to announce
the merger, told Reuters.
Tan will become chairman of the merged firm and his group
will take over the audit and finance functions of PMFTC. Philip
Morris will handle management, operations and marketing
Philip Morris Philippines will hold a press briefing on
Thursday at around 0400 GMT.
Philip Morris, which sells Marlboro cigarettes and is the
world's largest non-state-owned tobacco firm, has dominated the
high-end cigarette market in the Philippines for years.
Fortune Tobacco, on the other hand, is the top player in the
low-end cigarette segment.
"It has good synergy because it's complementary. Philip
Morris has never succeeded in penetrating the lower-priced
brackets and Fortune never entered the high-end market," the
Philip Morris reported a 5 percent rise in profit for the
quarter ended Dec. 31, beating analysts' estimates. The company
has been able to take advantage of growing cigarette demand in
emerging markets, even as higher taxes have taken their toll on
demand in parts of Western Europe. [ID:nN11184009]
Apart from the Philippines, Philip Morris also operates in
Japan, Italy, Germany, Russia and Turkey -- its key markets,
according to the company's website.
(Reporting by Rosemarie Francisco; editing by Elaine