💡 Philip Morris International: A transformation attempt that hits obstacles! 💼
Philip Morris International $PM+0.9% is a global tobacco company best known for producing the iconic Marlboro cigarette brand .
In 2021, the company decided to make a spectacular move - for £1.1 billion (£32.7 billion) the British pharmaceutical company Vectura Group, which specializes in the production of inhaled asthma drugs. The move was to be part of a wider strategy to transform PMI from a cigarette manufacturer into a global player in healthcare and wellness. 🏥
However, the strategy did not work out as expected. From the outset, the acquisition was met with a wave of criticism. Many argued that it was hypocritical for the tobacco giant to invest in healthcare when its main source of revenue still comes from cigarette sales. 🚬 Now that PMI has announced the sale of Vectura for just £150 million (£4.5 billion)it's clear that this route has not been successful. The significant financial decline in the value of Vectura over three years reveals the complexity of the transformation of traditional tobacco companies. 💸
One of the main reasons for the sale was "disproportionate burden" caused by the constant criticism of the tobacco company's ownership of the pharmaceutical company. PMI management therefore decided that the sale of Vecturato electronics firm Molex Asia Holdings was the logical solution to this situation. 🤝
It is interesting to note that PMI despite the sale, says it intends to continue in the health innovation business. As he said CEO Jacek Olczak, the company is committed to driving innovation in the sector. 💡
According to the latest financial results for the second quarter of this year, cigarette sales accounted for more than 60 % of PMI' s total sales of £7.2 billion. 🔍📊
What is your opinion of Philip Morris? Do you think it's morally permissible for a cigarette company to own a healthcare delivery facility at all?
The growth over the last few months is great, but I think it will be followed by a rapid decline again. It's a very similar scenario to 2017. I would be cautious here. I'll look for some shorts today :)