EU Fee gives conditional approval for Philip Morris-Swedish Match merger (NYSE:PM)

As anticipated, the European Fee has authorized Philip Morris’ (NYSE:PM) $15.7B bid for Swedish Match (OTCPK:SWMAY).

Nonetheless, the approval got here with sure caveats associated to doubtlessly anti-competitive impacts in Sweden. Particularly, the takeover of a “de facto monopoly on distribution of tobacco and nicotine merchandise in Sweden” through Swedish Match’s (OTCPK:SWMAY) subsidiary SMD Logistics was famous as a priority.

“The transaction may have led to foreclosures results in Sweden, on condition that SMD is the one distributor of flamable tobacco, smoke-free, and associated merchandise in Sweden,” the choice acknowledged.

The EU regulator mentioned that Philip Morris has provided to divest SMD Logistics to realize approval.

“The commitments include the structural divestiture of a stand-alone enterprise, which absolutely removes the vertical hyperlinks between the manufacture of tobacco and nicotine merchandise and their distribution in Sweden,” the Fee mentioned. “It will allow a purchaser to run the divested enterprise as a viable aggressive power out there on an enduring foundation. The Fee will carefully monitor the divestment course of, together with the selection of an appropriate purchaser for the divested enterprise that should be authorized by the Fee.”

US-listed shares of Swedish Match (OTCPK:SWMAY) rose 3% shortly after the announcement of the conditional approval.

Learn extra on the winding path the deal took to its current kind.