MANILA, Philippines ? US-based tobacco giant Philip Morris said Thursday it has formed a new company in the Philippines with local rival Fortune Tobacco Corp., owned by Chinese-Filipino tycoon Lucio Tan.
Tan will become chairman of the new company, to be called PMFTC in a deal that will "unite" the two firms' Philippine distribution and manufacturing operations.
Philip Morris Philippines Manufacturing Inc. (PMPI), which operates mainly in the premium brand market, and Tan's closely held Fortune Tobacco Corp. (FTC) did not give a monetary value on the deal.
"The Philippines is one of the largest global cigarette markets with an estimated 2009 volume of 85 billion cigarettes. FTC is one of the five largest privately-owned cigarette companies in the world," the Philip Morris statement said.
PMPI employs around 1,000 workers while Fortune Tobacco has around 4,000 employees. It is not yet clear whether the new venture will result in job losses.
Philip Morris International said it had a 15.4 percent share of the total international cigarette market outside of the United States in 2009.
"This transaction is a tremendous strategic fit for our business that will cement our leadership in South East Asia," said Matteo Pellegrini, president of Philip Morris in Asia.