Philip Morris to buy South African snuff maker

Philip Morris International Inc., maker of Marlboro and other cigarettes for sale overseas, has agreed to buy a Swedish company's South African snuff and pipe-tobacco operations for roughly $222 million.
Philip Morris International estimated that Swedish Match South Africa Ltd.'s products account for about 31 percent of total tobacco consumption in South Africa. The brands involved in the deal, announced yesterday, include Boxer, Best Blend and Taxi.
In March 2008, Philip Morris International, with offices in New York and Lausanne, Switzerland, was spun off from Henrico County-based Altria Group Inc., which owns Philip Morris USA.
Swedish Match also owns Swedish Match North America, a Chesterfield County-based maker of cigars and smokeless tobacco.
Spokesmen for Altria and Swedish Match North America said their operations are not affected by the deal.
The deal "represents an excellent strategic fit for our business in South Africa," Jean-Claude Kunz, president of Philip Morris International's Eastern Europe, Middle East and Africa region, said in a statement.
Swedish Match South Africa reported sales of roughly $88 million last year.
Philip Morris International, the world's largest non-governmental cigarette seller, hopes to boost sales of smokeless-tobacco products to offset decreased demand for cigarettes because of concerns about health, smoking bans and price increases.
In February, Philip Morris International announced a 50-50 joint venture with Swedish Match AB to make and sell smokeless products such as snus -- teabaglike pouches that users stick between cheek and gum.
Philip Morris International said it expects to complete the acquisition of the South African company by the end of the fourth quarter, after approval by South African regulators.
"This agreement with Philip Morris International is in line with Swedish Match's strategy to focus on smoke-free tobacco, cigars and lights products," Swedish Match AB President and CEO Lars Dahlgren said in a statement.
Swedish Match South Africa will continue to distribute lighters, matches and cigars for Swedish Match, the company said.