Retail

US cigarette giant buys slice of Egyptian rival

May 23, 2024, 10:54 AM

Cigarette sellers in Aswan, Egypt. US company Philip Morris says it wants to give smokers in Egypt 'better options than cigarettes'

Philip Morris buys 15% of Eastern Co
Wants ‘a smoke-free future in Egypt’
Egypt currently home to 18m smokers

The American tobacco giant Philip Morris International (PMI) has acquired a minority stake in Egypt’s largest cigarette manufacturer.

PMI, which owns brands such as Marlboro, L&M, Merit and Parliament and is the world’s top tobacco company by market value, has bought 14.7 percent of Egypt’s Eastern Company, which also includes cigars and pipe tobacco in its portfolio.

The value of the deal was not disclosed.

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The acquisition will pave the way “to a path towards a smoke-free future in Egypt”, PMI said.

“We look forward to exploring potential areas of cooperation with Eastern, including opportunities to provide adult smokers in Egypt with better options than cigarettes,” said Fred de Wilde, PMI’s president for areas of the globe including the Middle East and Africa.

Foreign investors seek 15% of Egypt’s tobacco company

Out of a population of 104 million, 18 million Egyptians smoke, the country’s Central Agency for Public Mobilisation and Statistics says, although the number of smokers over the age of 15 dropped from 17.3 percent in 2020 to 16.8 percent in 2022.

Eastern Company produces 70 billion cigarettes a year, with a market share of around 75 percent in Egypt, its CEO, Hany Aman, said in an interview with Arab News last year.

In September Chemical Industries Holding Company completed the sale of 30 percent of its stake in Eastern Company, around 669 million shares, to the UAE-based Global Investment Holding for EGP16.4 billion ($350 million).

Egypt plans to raise $5 billion by selling stakes in 35 state-owned companies through offering shares to strategic investors or sales on the country’s stock exchange, or a combination of the two.

Smoke-free products accounted for approximately 37 percent of PMI’s total full-year 2023 net revenues.