The joint venture between Philip Morris International and bilyonaryo Lucio Tan’s Fortune Tobacco Corp. is streamlining operations to reduce cost and achieve sustainable growth.
In a regulatory filing, LT Group Inc. said PFMTC, an indirect subsidiary, approved a merger with Philip Morris Manufacturing Philippines Inc. with the former as the surviving entry.
LT Group said the merger is part of an internal restructuring process and is not expected to materially affect the operations, earnings and ownership of PMFTC.
The merger, which is subject to the approval by the Securities and Exchange Commission, is expected to take effect on June 1.
The tobacco business accounted for P12.12 billion or 75% of LT Group’s net income in the nine months to September this year, driven by the higher share of premium Marlboro with customers shifting from mid-priced Fortune as well as the price increases implemented in late August 2019 to pass on higher excise taxes.