Philip Morris in merger talks with Altria

The world's largest cigarette maker, Philip Morris International (PMI), said on Tuesday it was in merger talks with US firm Altria Group. An eventual tie-up would reunite the two tobacco companies more than a decade after Altria spun off from PMI.

A merger could help the two companies confront declining cigarette sales and focus on other products beyond the traditional tobacco market.

The companies are discussing a "potential all-stock merger of equals," Altria and PMI said in identical news releases, noting that any agreement would have to be approved by the company's boards of directors, shareholders and regulators.

The companies said they intended to make no further comment regarding the discussions "unless and until it is appropriate to do so."

Altria has diversified in recent years, taking stakes in wine, beer and cannabinoid companies as well as the leading US e-cigarette company, Juul Labs.

Shares in Philip Morris on Tuesday morning dropped more than 5% on Wall Street after the news of the merger talks, while Altria jumped around 8%. 

Read more: German drug czar slams tobacco advertising, demands billboard ban

kw/msh (AP, AFP, Reuters)

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