Philip Morris negotiates with Altria merger to create industry giant

Philip Morris International (PMI) is in talks about a merger with Altria. The agreement could create a smoke sector giant whose market value exceeds US $210 billion. In a statement, PMI said it was considering a merger of equals, using shares of the two companies. "There is no guarantee that any agreement or business will result from these discussions," the note says. The discussions take place while the two groups are seeking to build their presence in the electronic cigarette market. Last year, Altria agreed to take 35% of the group of electronic cigarettes Juul Labs, for US $13 billion. The conversations emerge after two years of British American Tobacco, the biggest rival of PMI and Altria, have agreed to buy Reynolds American in an agreement of US $49.4 billion. Many speculated that PMI could combine its operation with Altria as now the threat of litigation in the United States regarding tobacco, which forced the company to divide into two businesses, dissipated.