Philip Morris International Inc. PM said Monday it reached a 15-year collaboration agreement with South Korean tobacco and nicotine maker KT&G Corp. KR:033780 to commercialize KT&G’s smoke-free devices and consumables on an exclusive, worldwide basis, excluding South Korea. PMI CEO Jacek Olczak said the collaboration “will accelerate the achievement of a smoke-free future” with alternative tobacco products. The companies did not provide details on the financial structure or payments of the deal, but said it includes a “total commitment for the first three-year period equivalent to 16 billion consumables.” The new collaboration agreement comes after a three-year contract with PMI commercializing KT&G’s products in more than 30 markets. The WSJ reported in October that an activist investment firm called Flashlight Capital and founded by a veteran of Carlyle Group CG acquired a 1% stake in KT&G (formerly called Korea Tobacco & Ginseng) and was pushing for an emphasis on smokeless tobacco products and a spinoff of its ginseng unit. Philip Morris International stock has risen 2.5% so far in 2023, compared to a 6% rise by the S&P 500 SPX.
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