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Aug. 27, 2019, 1:56 p.m. EDT

S&P sees 'significant roadblocks' to completing a Philip Morris-Altria merger

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By Tomi Kilgore

S&P Global Ratings said there is insufficient information available regarding a potential all-stock merger between of equals between Philip Morris International Inc. /zigman2/quotes/201611010/composite PM -0.40% and Altria Group Inc. /zigman2/quotes/208895754/composite MO +1.14% to warrant any rating actions on either company. However, the credit rating agency said it believes there will be "significant roadblocks" to completing a merger, including agreeing on a valuation that both companies accept. "Specifically, we believe there could be significant disagreement over the valuation of the companies' next-generation products given the heightened regulatory scrutiny over some products (i.e. e-cigarettes) and the uncertain impact future regulatory actions could have, particularly in the U.S.," S&P Global Ratings said. If there is more evidence in the coming months that a deal is likely, S&P said it would then assess the potential rating of the combined company. Currently, S&P rates Philip Morris credit at A and Altria credit at BBB, which is just two notches above junk. Altria's stock dropped 3.2% in afternoon trading and Philip Morris shares shed 7.0%. Year to date, shares of Altria have lost 7.6% and Philip Morris have gained 8.4%, while the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.33% has advanced 10.7%.

/zigman2/quotes/201611010/composite
US : U.S.: NYSE
$ 81.47
-0.33 -0.40%
Volume: 1.42M
Oct. 22, 2019 12:36p
P/E Ratio
16.95
Dividend Yield
5.75%
Market Cap
$127.27 billion
Rev. per Employee
$382,519
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/zigman2/quotes/208895754/composite
US : U.S.: NYSE
$ 46.08
+0.52 +1.14%
Volume: 3.90M
Oct. 22, 2019 12:36p
P/E Ratio
13.69
Dividend Yield
7.31%
Market Cap
$85.11 billion
Rev. per Employee
$2.36M
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
26,917.33
+89.69 +0.33%
Volume: 116.04M
Oct. 22, 2019 12:36p
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