Cigarette maker Philip Morris to buy UK producer of respiratory treatments

US Materials 9 July 2021 16:49 (UTC +04:00)
Cigarette maker Philip Morris to buy UK producer of respiratory treatments

Cigarette maker Philip Morris International agreed on Friday to buy Vectura for 1.05 billions pounds ($1.44 billion), giving the U.S. firm access to the British drugmaker's respiratory ailment treatments and inhaling device technology, Trend reports with reference to Reuters.

The deal, which topped a proposal by investment firm Carlyle Group, offers 150 pence a share to investors in Vectura, which makes 13 approved inhaled medicines and associated devices.

The offer by Philip Morris, which also makes a range of vaping products, is 11% higher than Vectura's closing price on Thursday and beats Carlyle's bid agreed in May of 136 pence.

Vectura, whose shares rose as much as 14% to 154 pence, 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 said it was "considering its options and a further announcement will be made in due course." It said it encouraged Vectura shareholders to take no action in the meantime.

Analysts at Peel Hunt said Philip Morris bid underscored the strategic value of Vectura's technology platform, reducing the likelihood of private equity participation in the sale process.

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 launched its 'beyond nicotine' strategy in February, saying it expected more people to quit smoking in the coming years amid health concerns and regulatory crackdowns.

The U.S. company said it planned for Vectura to operate as an independent unit at the centre of its inhaled therapeutics business, seeking to use its expertise in inhalation and aerosolization in areas such as respiratory drug delivery.

Philip Morris said the acquisition of Vectura meant "the companies can create a fully-owned pipeline of products across a broad range of sectors in the prescription drug and over-the-counter categories."

Philip Morris Chief Executive Jacek Olczak said acquiring Vectura and Fertin Pharma would help the U.S. firm's 'beyond nicotine' strategy "by expanding our capabilities in innovative inhaled and oral product formulations."

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