Ministers have been urged to intervene in tobacco giant Philip Morris’s £1 billion takeover of the lung treatments specialist Vectura.
The US -listed Marlboro maker last week agreed a 150p-a-share deal to buy Vectura. The company, based in Wiltshire, makes inhalers to treat asthma and respiratory diseases — conditions often exacerbated by smoking.
Big tobacco’s approach has prompted outrage among politicians. Liberal Democrat leader Ed Davey said it was “totally wrong” that Philip Morris would seek to profit from conditions such as asthma and serious lung disease. “[It] has done absolutely nothing positive for people’s health, and instead has done everything possible to try and stop governments passing anti-smoking legislation,” he said.
“If they are really serious about making amends, they should be investing their millions in helping people stop smoking, rather than trying to profit on the results of smoking.” Jon Ashworth, the shadow health secretary, said he would be writing this weekend to the business secretary, Kwarsi Kwarteng, and the health secretary Sajid Javid to ask them to “use their powers to block the deal”. “This is a massive test of Sajid Javid’s commitment to public health,” he said. “We do not think this is an appropriate takeover.”
The planned acquisition of Vectura is part of the tobacco giant’s race to transform its business in the wake of falling cigarette revenues. Some 175 years after it began selling cigarettes, Philip Morris last week declared that it planned to become a “healthcare and wellness” company, moving towards a “smoke-free future”. It wants to generate at least $1 billion in annual revenues by 2025 from what it calls “beyond tobacco and nicotine” products.
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The company’s biggest initiative is IQOS, a cigarette-like device that heats tobacco rather than burning it. It accounted for 30 per cent of the company’s sales in the first three months of this year. The strategy contrasts with FTSE 100-listed rival Imperial Brands, which has scaled back its ambitions to invest in alternatives to tobacco and instead doubled down on its cigarette brands, which include Winston.
Vectura, which had agreed to an earlier 136p-a-share offer from private equity firm Carlyle, has partnerships with drugmakers including Novartis and Hikma.
Philip Morris, which has a market value of $155 billion (£110 billion), said that it intended Vectura to operate as an “autonomous” business unit that would be the backbone of its inhaled therapeutics business.
Bob Blackman, Tory chairman of the all-party parliamentary group on smoking and health, said he would write to health minister Jo Churchill to ensure Philip Morris was not allowed to use its ownership of Vectura to “worm its way back into government circles”. At a lecture in May, Chris Whitty, England’s chief medical officer, blamed big tobacco for causing more deaths than Covid-19 last year. “The great majority of people who die of [lung] cancer die so a small number of companies can make profits from the people who they have addicted at young ages — and then keep addicted to something which they know will kill them,” he said.
