In statements released Tuesday, Philip Morris International and Altria Group confirmed discussions about a potential all-stock “merger of equals.” A combined company could be worth more than $200 billion.
Altria’s stock surged 11% at its peak following the news, while Philip Morris declined as much as 11%.
A merger would bring the two companies back together more than a decade after they split. In 2008, Altria spun off PMI to focus on the US tobacco market, while PMI has been focused on overseas sales.
The team-up talks come at a time when cigarette smoking is declining and electronic-cigarette use is growing in popularity. To that end, Altria is attractive after paying $12.8 billion in December for a stake in Juul Labs, a leading vape company that’s popular with millennials and Gen Zers. A merger could help Juul expand internationally.