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A-Brands

Philip Morris To Buy UK's Vectura In 'Beyond Nicotine' Push

Marlboro cigarettes maker Philip Morris International agreed on Friday to buy British drugmaker Vectura for £1.05 billions ($1.44 billion) to bolster its portfolio of products that are free from tobacco or nicotine.

The deal, which topped a proposal by investment firm Carlyle Group, means shareholders in the drugmaker that makes about 13 inhaled medicines will get 150 pence per share in cash, 11% higher than its Thursday closing price.

Carlyle's offer, agreed in May, was 136 pence per share.

Vectura, whose shares rose nearly 13% to 152 pence at 0730 GMT, said it was withdrawing its recommendation for the Carlyle offer in favour of the Philip Morris bid and was adjourning a shareholder meeting it had convened on Monday.

Carlyle did not immediately respond to a request for comment.

International Acquisition

The deal is Philip Morris' second international acquisition in the past week, after agreeing to buy nicotine gum maker Fertin Pharma from private equity firm EQT for 5.1 billion Danish Krone ($812 million).

The cigarette maker unveiled its 'beyond nicotine' strategy in February, as it expects more people to quit smoking in the coming years amid health concerns and regulatory crackdowns.

The US-based company has plans for Vectura to operate as an independent unit at the centre of its inhaled therapeutics business, seeking to use its expertise in inhalation and aerosolisation in areas such as respiratory drug delivery.

Philip Morris Chief Executive Jacek Olczak said the Vectura acquisition after buying Fertin Pharma would help the US firm accelerate its 'beyond nicotine' strategy "by expanding our capabilities in innovative inhaled and oral product formulations."

The deal requires the approval of shareholders, among other conditions.

News by Reuters, edited by ESM. For more A-Brands stores, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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