Tobacco group Philip Morris International has bought a 22.61 percent stake in British asthma inhaler firm Vectura. This is part of the deal to acquire the U.K.-based respiratory drug developer for USD 1.51 billion or 1.1 billion pounds. The purchase comes days after the tobacco group got unanimous backing from the asthma inhaler firm’s board for its 165 pence per share or USD 2.27 per share offer. Following it, the company entered a tendered period with Vectura. This comes as Philip Morris outbid private equity firm Carlyle in a fierce bidding war. Carlyle’s final offer was 155 pence per share. The tobacco giant said now it is planning to make further purchases.
Vectura’s board said that it went with Philip Morris International considering the superior cash price offered to its shareholders. The board also said that Vectura will be benefitted from the significant financial resources of Philip Morris. Commitment for better research and development is among the factors that the board considered while making the final decision. Philip Morris aims to use Vectura’s proficiency in device design and inhalable formulations to develop a range of respiratory therapies. The acquisition comes at a time when PMI is trying for its image makeover. This is following lawsuits and negative publicity for selling products that are harmful. Philip Morris has said that it is preparing for a ‘smoke-free’ future. This is when the major portion of the company’s revenues comes from cigarettes.
Commenting on the development, PMI CEO Jacek Olczak said that the deal is part of a long-term strategy to use our expertise. “We want to invest in a scientific field which will help the development of inhalers for a wide range of requirements. As we embark on the next stage of our journey, we are looking forward to working great people of Vectura,” Olczak said. Meanwhile, there are several who are not happy with the deal. At least 35 health charities and public health experts signed an open letter in which they urged Vectura to reject the acquisition offer of Philip Morris. They said that deal could have a negative impact on the research and production capacity of Ventura. It must be noted that PMI has been saying that it would stop selling cigarettes in the United Kingdom with a decade.