Philip Morris International Inc. (PM) has agreed to buy Grupo
Carso SAB's (GPOVY, GCARSO.MX) 20% stake in its Mexico tobacco
business for about $700 million, giving the tobacco company
complete ownership of its Mexican unit.
"We have benefited greatly from our partnership with Grupo Carso
and we remain confident in our ability to excel in this important
market in the years ahead," said James Mortensen, Philip Morris's
president of the Latin America and Canada region.
Grupo Carso--a conglomerate founded by the one of the world's
richest men, Carlos Slim Helu--is selling its stake in Philip
Morris Mexico SA at a final price that is subject to a potential
adjustment based on Philip Morris Mexico's actual performance.
The deal is expected to close by the end of September and is
projected to marginally add to Philip Morris' earnings per share as
of the fourth quarter.
In 2012, Philip Morris's market share of Mexico's total tax-paid
cigarette industry volume of 33.6 billion cigarettes was 73.5%. The
company's flagship brand, Marlboro, is the leading brand in Mexico
with a market share of 53.6% last year.
As a result of volume declines in many developed countries,
Philip Morris has sought to increase exposure to emerging
markets.
In April, Philip Morris said its first-quarter profit shrank
1.7% as the tobacco giant's higher costs offset stronger revenue.
For the quarter, the company reported its volume shrank 7.5% in
Latin America and Canada.
Shares closed Monday at $95 and were inactive in premarket
trading. The stock has risen 12% in the past 12 months.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
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