Philip Morris International Inc will buy nicotine gum maker Fertin Pharma from private equity firm EQT for DKK5.1 billion (€690 million), the cigarette maker said on Thursday, as it looks to build its smoke-free portfolio.
Fertin Pharma products include chewing gums, tablets and powders that are used for pharmaceutical and nutraceutical applications and helps people quit harmful cigarette smoking.
Philip Morris has invested more than $8.1 billion (€6.8 billion) over the years to develop smoke-free products, an area of business that it believes " will one day replace cigarettes."
It plans to generate more than 50% of its revenue from smoke-free products and at least $1 billion from products beyond nicotine by 2025.
Jacek Olczak, chief executive officer of Philip Morris, stated, "The acquisition of Fertin Pharma will be a significant step forward on our journey towards delivering a smoke-free future—enhancing our smoke-free portfolio, notably in modern oral, and accelerating our progress in beyond nicotine.
"Both PMI and Fertin share a commitment to science and consumer-centric innovations for better living, and I am delighted we have reached this agreement."
The company is also focusing on its heated-tobacco product IQOS as people move away from combustible tobacco products like cigarettes.
In 2020, nearly three billion Nicotine Replacement Therapy doses were manufactured, that helped more than 3.2 million people reduce and quit smoking, Fertin Pharma said.
The deal is expected to close later in 2021.
'An Inspiring Transformation'
Peter Halling, CEO of Fertin Pharma, commented, "PMI is going through an inspiring transformation as a company with an ambition to deliver a smoke-free future and building a beyond nicotine product portfolio.
"In PMI, we have found a new owner and partner who shares our vision, who is committed to science, and who will enable Fertin Pharma to further accelerate and grow as a company."
In 2020, Fertin Pharma generated net revenues of DKK 1.1 billion (€150 million). It is a privately held company with more than 850 employees, operating in Denmark, Canada, and India.