If you think quitting smoking is hard, Philip Morris International (PM) and Altria (MO) seem to have a hard time quitting each other. Yes, this sounds suspiciously like the divorced parents of the person you dated in college reuniting at graduation and deciding they'd made more than one mistake in their lives.
Maybe a mistake here is assuming that smoking, as we have known it for 300 years, wouldn't change. But it has and we are in the middle of a full on vaping revolution.
This week, British American Tobacco (BATMF) agreed to pay $49 billion to take full control of Reynolds American (RAI) , the maker of brands such as Newport, Kent and Pall Mall. The transaction creates the worlds largest tobacco company, unless, Philip Morris and Altria get back together. For Altria, the domestic cigarette purveyor, this would lessen its foreign exchange hit. The combined company would have double the benefits of whatever corporate tax incentives the incoming Trump administration has promised.
More importantly, a reunited Philip Morris / Altria could collaborate on its vapor tobacco product offering, which is considered a better smoke delivery system than anything on the BAT drawing board, and which would immediately jump to the highest reaches of cutting-edge smoke delivery systems. Even if history looks back on these innovations as being rather dubious.