Philip Morris to Acquire Interest in Russian Megapolis Group
Philip Morris International Inc. (PMI) announces its agreement to acquire a 20 percent equity interest in Megapolis Distribution BV, the holding company of CJSC TK Megapolis (Megapolis), PMI’s distributor in Russia. The purchase price of $750 million excludes an additional payment of up to $100 million which is contingent on Megapolis’s operational performance over the four fiscal years following the closing of the purchase. PMI expects the transaction to be completed by the end of 2013 without requiring regulatory approvals. The transaction is projected to be accretive to PMI’s earnings per share as of the first quarter of 2014.
“We are delighted to reach this agreement with Megapolis, our proven distribution partner, which will support our business expansion in this profitable market,” says Miroslaw Zielinski, PMI’s President, Eastern Europe, Middle East & Africa Region and PMI Duty Free. “In addition to enhanced earnings and cash flow for PMI, this investment paves the way for infrastructure expansion and improved operating efficiencies in the strategic area of distribution in Russia, and will therefore benefit our wide portfolio of leading brands.”
Megapolis is one of Russia’s leading consumer goods distributors focusing principally on tobacco and beverages. It employs almost 15,000 employees and commands a direct store delivery system that reaches more than 150,000 points of sale. Megapolis handles approximately 70 percent of the cigarettes sold in Russia through its distribution agreements with PMI, Japan Tobacco International and Imperial Tobacco Group.
This announcement is made concurrently with that of Japan Tobacco International regarding its agreement to also acquire a 20 percent equity interest in Megapolis Distribution BV.
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“We are delighted to reach this agreement with Megapolis, our proven distribution partner, which will support our business expansion in this profitable market,” says Miroslaw Zielinski, PMI’s President, Eastern Europe, Middle East & Africa Region and PMI Duty Free. “In addition to enhanced earnings and cash flow for PMI, this investment paves the way for infrastructure expansion and improved operating efficiencies in the strategic area of distribution in Russia, and will therefore benefit our wide portfolio of leading brands.”
Megapolis is one of Russia’s leading consumer goods distributors focusing principally on tobacco and beverages. It employs almost 15,000 employees and commands a direct store delivery system that reaches more than 150,000 points of sale. Megapolis handles approximately 70 percent of the cigarettes sold in Russia through its distribution agreements with PMI, Japan Tobacco International and Imperial Tobacco Group.
This announcement is made concurrently with that of Japan Tobacco International regarding its agreement to also acquire a 20 percent equity interest in Megapolis Distribution BV.
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