The tobacco company Philip Morris International (PMI) has sealed its controversial £1.1bn takeover of the asthma inhaler maker Vectura, after more than half of the target company’s shareholders agreed to sell their stock.
PMI said it had either bought shares, or received acceptances of its offer, reaching just under 75% of the company, well ahead of the 50% it needed.
The offer has become “unconditional”, meaning the remaining shareholders cannot prevent it and can in effect be compelled to sell.
The takeover of a respiratory disease specialist by a cigarette company has sparked outrage among health charities and public health experts around the world.
But the Marlboro maker has argued that its transition away from cigarettes requires it to move into fields such as respiratory medicine, where it already has some expertise.
Jacek Olczak, the chief executive of PMI, said on Thursday: “We are very excited about the critical role Vectura will play in our Beyond Nicotine strategy and look forward to working with Vectura’s scientists and providing them with the resources and expertise to grow their business to help us achieve our goal of generating at least $1bn in net revenues from Beyond Nicotine products by 2025.”
Vectura investors had been given until 15 September to decide whether to sell to PMI, which claims to have ambitions for a “smoke-free” future, but still generates three-quarters of its revenue from cigarettes.
Under market rules governing takeovers, PMI was not allowed to build its stake by buying shares from investors within the US.
But it was able to buy stock from other international investors to move closer to its 50% target. It said in August that it had gathered 29% of the stock, as it sought to reach 50%.
At that point, which PMI has now reached, reluctant shareholders have little incentive to hold out because PMI would take control of the company anyway. PMI said on Thursday morning that investors could still their shares to it until 30 September.
Sarah Woolnough, the chief executive of Asthma UK and the British Lung Foundation, said: “Vectura has sold out millions of people with lung disease, and instead prioritised short-term financial gain over the long-term viability of Vectura as a business. Vectura is now owned by a tobacco company, and this could cause considerable problems, such as the firm being excluded from research and clinical networks. It creates perverse incentives for PMI to sell more of its harmful products so they might then profit again through treating smoking-related diseases.
“There’s now a very real risk that Vectura’s deal with big tobacco will lead to the cigarette industry wielding undue influence on UK health policy.”