PMI Halts $1 Billion Cigar Business Sale

Key points：

1.PMI has temporarily suspended the sale of its $1 billion U.S. cigar business due to unstable market conditions.

2. ZYN nicotine pouches had strong sales in the first quarter of 2025, with PMI forecasting sales to exceed 800 million for the year, representing a potential increase of up to 45% compared to the previous year.

3.Smoke-free products such as ZYN and IQOS accounted for 42% of total revenue in the first quarter of 2025, with the goal of achieving a sales share of over 67% by 2030.

4.The PMI Kentucky factory ZYN production has resumed ahead of schedule, with a target annual production capacity of 900 million cans. The Colorado new factory is expected to start production in early 2026.

According to Bloomberg, on April 23, 2025, Philip Morris International (PMI) announced that it has decided to temporarily suspend its original plans to sell or divest its $1 billion worth U.S. cigar business due to the current unstable market conditions. This is the latest deal to fall through recently due to market volatility.

This business is part of Philip Morris International's (PMI) acquisition of Swedish Match for $16 billion. On the same day, Reckitt Benckiser Group Plc also stated that market uncertainties may affect the timing of the sale of a group of its household care products.

Philip Morris International (PMI) had initially planned to sell its American cigar business in order to focus on shifting its future growth focus to smoke-free alternatives, gradually moving away from traditional tobacco products.

The company pointed out that sales of the ZYN nicotine pouch products acquired from Swedish Match were strong, driving overall performance growth. As a result, the company has raised its adjusted earnings per share forecast for 2025 to a maximum of $7.49, higher than the previously set maximum target of $7.17.

Philip Morris International (PMI) reported that its smoke-free business, which includes ZYN nicotine pouches and IQOS heated tobacco products, accounted for 42% of the company's total net revenue in the first quarter of 2025. The company aims to have smoke-free alternatives represent over two-thirds of its total sales by 2030.

ZYN nicotine pouch products experienced a shortage last year due to production issues, but the company stated that as of March this year, production capacity problems have been resolved ahead of schedule, and production volume has also increased ahead of schedule. Philip Morris International (PMI) plans to increase its factory capacity in Kentucky to produce 9 billion cans per year, while also expecting its new factory in Colorado to begin production in early 2026.

In the first quarter of 2025, shipments of ZYN nicotine pouch products in the United States exceeded expectations. The company predicts that shipments in 2025 will be between 800 million and 840 million cans, representing a year-on-year growth of up to 45%.

Due to increasing concerns about the health risks of tobacco, there is a growing demand for nicotine pouches. These products involve placing a nicotine pouch between the upper and lower lips. In early 2025, the US FDA approved all ZYN products currently being sold in the US.

Subsequently, under the leadership of the new administration, the Food and Drug Administration (FDA) in the United States conducted a major restructuring resulting in significant layoffs and the dismissal of Brian King, the head of tobacco regulation.