Philip Morris Creates U.S. Role -- WSJ

By Jennifer Maloney 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (March 3, 2020).

Philip Morris International Inc. said it was promoting one of its top executives to a newly created role overseeing the U.S. market, a signal the tobacco company plans an expanded role on Altria Group Inc.'s home turf.

Philip Morris's chief financial officer, Martin King, has been named chief executive officer of PMI America. He will be the point person for an arrangement in which Altria is selling Philip Morris's heated tobacco device, IQOS, in the U.S. Mr. King will also explore new technologies in the U.S. in which to invest through his company's venture arm.

The company hired an outsider, Emmanuel Babeau, to take over the finance role. Most recently the deputy CEO of Schneider Electric S.E. in charge of finance and legal affairs, Mr. Babeau will join Philip Morris as CFO on May 1. He was previously group CFO at the spirits company Pernod Ricard SA.

Philip Morris and Altria -- which were split apart in 2008 -- hold the same portfolio of cigarettes, including industry leader Marlboro. The products are sold by Altria in the U.S. and Philip Morris elsewhere. The two tobacco giants held talks last year on a potential merger but called off those discussions in September amid uncertainty around vaping regulations in the U.S.

Mr. King said he would focus on increasing his company's lobbying and engagement with U.S. regulators after a vaping-related lung illness last year prompted U.S. health officials to warn against the use of all vaping products. The U.S. Centers for Disease Control and Prevention later said the illness was linked not to e-cigarettes but to vaping devices containing marijuana extracts and vitamin E oil. But the initial warnings reverberated around the world and prompted Philip Morris to postpone the planned launch of a new e-cigarette in Europe.

Regulators in the U.S. have powerful influence in setting the tone globally on issues such as underage vaping and the potential role of reduced-risk tobacco products for adult cigarette smokers, Mr. King said in an interview Monday. "All of these topics are critical to us around the world and the U.S. plays a huge role in setting that framework and tone," he said.

Altria launched IQOS, a device that heats tobacco sticks but doesn't burn them, in the U.S. in September through a partnership with Philip Morris. The device is available in Atlanta and Richmond, Va., and is expected to go on sale in Charlotte, N.C. in April.

Write to Jennifer Maloney at [e-mail]

Corrections & Amplifications Philip Morris International and Altria held talks last year on a potential merger. An earlier version of this article incorrectly stated the companies held talks this year. (March 2)

(END) Dow Jones Newswires

March 03, 2020 02:47 ET (07:47 GMT)

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