Philip Morris International announced, on Wednesday, its acquisition of an indirect minority stake of 14.7% in the Eastern Company, the largest tobacco manufacturer in Egypt. Philip Morris did not disclose the value of the deal.
It was stated that the two companies will explore potential areas of strategic cooperation within the framework of the deal, including heated tobacco device products.
Heated tobacco device products heat the tobacco rather than burning it to avoid harmful chemicals resulting from combustion.
Philip Morris’s Equus heated tobacco device is already a global market leader, but the products are mostly popular in developed markets.
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Philip Morris has recently been looking to increase demand in developing markets, including through inexpensive tobacco heating devices.
Fred de Veld, the company’s president for Southeast Asia, the Commonwealth of Independent States, the Middle East and Africa, said: “We look forward to exploring potential areas of cooperation with the Eastern Company, including opportunities to provide adult smokers in Egypt with better options compared to cigarettes.”
Philip Morris shares rose 0.5%. (Reuters)