US: Altria-Philip Morris end mega-merger talks

Altria Group and Philip Morris International have ended merger discussions with Altriaover e-cigarettes, reported The Wall Street Journal.

“While we believed the creation of a new merged company had the potential to create incremental revenue and cost synergies, we could not reach agreement,” said Howard Willard, Altria’s CEO. “We look forward to continuing our commercialization of IQOS in the US under our existing arrangement.”

The two sides had been negotiating for weeks but the Philip Morris board became increasingly uncomfortable with the deal amid the shifting US regulatory environment, said one person familiar with the matter.

Tobacco stocks have slumped after reports emerged the Food and Drug Administration said it’s investigating 127 reports of seizures after vaping. Altria owns Juul Labs, which has come under fire for marketing unauthorized modified risk tobacco products, including to youth.

The FDA has received around 92 new reports of people, especially kids and young adults, experiencing seizures after using e-cigarettes since it first announced its probe into the issue in April. It is unclear whether the e-cigarettes caused the seizures, reported the WSJ.