Tobacco.org

Rothmans deal presents challenges for Philip Morris 

Philip Morris International Inc.’s friendly $2-billion takeover of Canadian cigarette maker Rothmans Inc. may not be material in financial terms given the U.S. tobacco giant’s more than US$100-billion market capitalization, but it does increase its litigation exposure.

This factor, along with the extreme difficulty Philip Morris will have in bringing its brands to bear in Canada – it cannot use the Marlboro name, for example, since British American Tobacco plc owns the brand – has Citigroup’s Adam Spielman telling clients that he doesn’t like the deal.

He even had photos of du Maurier packs with a impotentcy-warning limp cigarette and stroke-worthy lung to demonstrate some of the challenges Canada presents.

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