Philip Morris International Inc. said it may not proceed with its planned $452 million bid to acquire privately owned cigarette maker Productora Tabacalera de Colombia, or Protabaco, in the wake of conditions handed down Tuesday by Colombia’s antitrust regulator.
The Altria Group Inc. spinoff is evaluating those conditions, and Philip Morris said Wednesday it expects to decide whether it will proceed with the deal within the next three months.
The Colombian regulator, which initially had rejected the takeover bid in June, on Tuesday said Philip Morris would have to sell Protabaco’s Premier brand and another one of the company’s choice to a local or foreign competitor and offer to manufacture the brands’ cigarettes for the buyer.
Philip Morris would have to fulfill the conditions within three months. The regulator also is requiring Philip Morris to keep the market open for tobacco growers and cigarette retailers.
Protabaco is the second-largest tobacco company in Colombia. The regulator in blocking the acquisition in June said the purchase would hamper competition in the local market since Philip Morris would control almost 80% of the Colombian cigarette market. In 2005 and 2006, Philip Morris acquired Colombia’s largest cigarette maker, Coltabaco, for a little more than $300 million. (Tess Stynes / Dow Jones Newswires)
