Altria and Philip Morris International merging? Now at first, you might think that the possible merger of two cigarette giants has no place on a cigar media outlet. But Altria isn’t just a cigarette manufacturer. They are also a cigar producer, as they produce the massively popular machine-made black & milds. And they are the owner of the Nat Sherman brand, bot the retail shops and the cigar brand. Altria and Philip Morris International are talking about a merger between the two companies.
Philip Morris started the rebranding of their company to Altria in 2003. Altria is Latin for ‘high’. And in 2008, the company split up into Altria for the American market and Philip Morris International for the rest of the world. Philip Morris USA exists, but it is part of Altria. So that the companies are now discussing a merger is turning the clock back 15 years. But according to both companies, the world of tobacco has changed so much, that a merger would be good for the companies and the shareholders. New smokeless tobacco, declining cigarette sales, and stricter legislation make a merger sensible.
Altria has a 35% minority share in the smokeless tobacco manufacturer Juul. Juul has a big percentage of the market share in the United States when it comes to vaping. And Philip Morris International has their own IQOS smokeless tobacco system. IQOS has been approved by the FDA to be sold on the American market. And after a merger, the new company would be the biggest player on the smokeless tobacco market in the United States.
Altria and cigars
The company entered the cigar industry in 2008 when they bought John Middleton Co. That company is responsible for producing machine-made cigars such as Black & Mild, Middleton’s Cherry Blend, Gold & Mild and Prince Albert’s. And in 2017, Altria acquired the Nat Sherman group. That included everything with the Nat Sherman name. From the cigarettes to the cigars, and the retail shop. Last year, Altria acquired S&B Brands from the Bailey family. That purchase included the cigarette brands, tobacco growing operation, and the cigarette factory. But the cigar brand from Bailey, Cornelius & Anthony was excluded from the deal. The Bailey family is still running the Cornelius & Anthony brand.
What would this merger mean for Nat Sherman? The sales took a hit after Cigar Aficionado revealed that Altria is against an exemption for premium cigars by the FDA. A merger between Philip Morris International and Altria can result in three things. The first scenario is that nothing will change for Nat Sherman. The second scenario is that the company will put the cigar brand for sale, or even discontinue it. But the third scenario is that Nat Sherman will be distributed worldwide through the network of Philip Morris International. For now, Nat Sherman is only sold in the United States. Only time will tell.