Tobacco company Reynolds American reportedly in talks to buy Swedish maker of products to help smokers kick the habit
Jump to full article: Globe and Mail (ca), 2009-11-10
Author: Susan Krashinsky
Intro: Like a fast-food chain selling diet supplements or a gasoline company building electric cars, a major tobacco company is eyeing a surprising business: Helping the smokers who buy their products kick the habit.
Reynolds American Inc. , which sells the Camel and Pall Mall brands of cigarettes, is in talks to buy a Swedish company that makes nicotine gum and mouth spray designed to help people quit smoking by reducing their cigarette cravings, according to a report in The Wall Street Journal.
Reynolds could buy Niconovum AB for roughly $44.5-million (U.S.), according to University of Ottawa law professor and tobacco expert David Sweanor, who said he had spoken with someone close to the deal. A spokesperson for Reynolds declined to comment.
The deal would also mark a shift for cigarette companies, many of which embraced diversification decades ago but have changed course in recent years. . . .
The acquisition of Niconovum would give Reynolds another cigarette alternative.
In addition to the gum and mouth spray, the Swedish company also makes a Snus-like product called the Zonnic pouch, which has nicotine but no tobacco. Many countries in the European Union as well as Australia and New Zealand, ban oral tobacco, Prof. Sweanor said. The pouch could give Reynolds a way around those regulations.
"I think this may be a very profitable business. They're catering to the same crowd, essentially," said Indiana University's Prof. Beneish, who was a smoker for 30 years. "They have a captive audience. Trust me."
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