Tobacco giants Philip Morris International and Altria in merger talks

Philip Morris International (PMI) has confirmed it is in merger talks with rival Altria over a deal to bring together two of the world’s biggest tobacco firms.

The move would bring together the international and US manufacturers of Marlboro to create a tobacco giant with a market value of around 210 billion US dollars (£171 billion).

New York-listed shares in Philip Morris dipped in early trading amid rumours of a possible deal, while Altria saw its shares rise sharply.

The deal would come more than a decade after Altria first sold Philip Morris International, but it still holds Philip Morris USA.

The two companies said there is “no assurance” that the discussions will lead to an agreement or transaction.

In a statement, PMI said: “Philip Morris International today announced that it is in discussions with Altria Group regarding a potential all-stock merger of equals.

“Any transaction would be subject to the approval of the two companies’ boards and shareholders, and regulators, as well as other conditions.

“Philip Morris International intends to make no further comment regarding the discussions unless and until it is appropriate to do so.”

Both companies have made significant steps into the smoke-free and e-cigarette segment in recent years as attitudes towards smoking continue to shift.

Philip Morris has heavily invested into its “heat-not-burn” product Iqos, while Altria secured a £10 billion deal to buy a 35% stake in vaping giant Juul last year.