(Bloomberg) -- Philip Morris International Inc. is exploring a potential sale of its cigar business in the US, people familiar with the matter said, as the tobacco maker continues its shift toward smoke-free products.
Most Read from Bloomberg
The company is working with advisers to gauge buyer interest in the asset, according to the people. Philip Morris is seeking over $1 billion for the cigar business, they said.
Deliberations are ongoing and there’s no certainty they’ll lead to a sale, the people said, asking not to be identified discussing confidential information.
The cigar business was part of Swedish Match AB, which Philip Morris acquired in a $16 billion deal that was completed in 2023. That deal, which added Zyn nicotine pouches to its portfolio, helped propel Philip Morris’s transition away from traditional cigarettes.
The company’s shares have soared 72% in the past 12 months through Friday’s close in New York.
“In 2024, we announced a strategic review of our US cigar business. We have no updates at this time,” a representative for Philip Morris said in an emailed statement.
A potential sale comes as tobacco companies seek other ways to make money to combat declining smoking rates around the world.
Although still known for its famous cigarette brands including Marlboro and Parliament, Philip Morris is trying to reduce its reliance on traditional tobacco-based products. Chief Executive Jacek Olczak has previously said the company would one day sell its last cigarette. “The destination is a given,” he told Bloomberg.
Currently, about 40% of its sales come from smoke-free products, and Philip Morris has set a target of reaching two thirds by 2030. IQOS, its heated tobacco products, surpassed Marlboro in terms of sales last year, propelled by a high take up in markets such as Japan.
The company beat estimates with its fourth-quarter earnings, helped by growing demand for its Zyn pouches, which contain nicotine but not tobacco.
Still, the transition has not been straightforward. In the UK, Philip Morris has faced criticism over its ambition to expand into health care. In September, it announced plans to sell British asthma inhaler-maker Vectura Group Ltd. for roughly a third of the $1.2 billion it paid to acquire it in 2021.
Story Continues
--With assistance from Sabah Meddings.
(Updates with shares in fifth paragraph, context throughout.)
Most Read from Bloomberg Businessweek
©2025 Bloomberg L.P.
