Philip Morris International Inc. Announces Agreement to Acquire a 20% Interest in Russian Megapolis Group

  Philip Morris International Inc. Announces Agreement to Acquire a 20%
  Interest in Russian Megapolis Group

Business Wire

NEW YORK -- December 4, 2013

Regulatory News:

Philip Morris International Inc. (NYSE / Euronext Paris: PM) (“PMI”) announces
today its agreement to acquire a 20% equity interest in Megapolis Distribution
BV, the holding company of CJSC TK Megapolis (“Megapolis”), PMI’s distributor
in Russia. The purchase price of $750 million excludes an additional payment
of up to $100 million which is contingent on Megapolis’s operational
performance over the four fiscal years following the closing of the purchase.
PMI expects the transaction to be completed by the end of 2013 without
requiring regulatory approvals. The transaction is projected to be accretive
to PMI’s earnings per share as of the first quarter of 2014.

“We are delighted to reach this agreement with Megapolis, our proven
distribution partner, which will support our business expansion in this
profitable market,” said Miroslaw Zielinski, PMI’s President, Eastern Europe,
Middle East & Africa Region and PMI Duty Free. “In addition to enhanced
earnings and cash flow for PMI, this investment paves the way for
infrastructure expansion and improved operating efficiencies in the strategic
area of distribution in Russia, and will therefore benefit our wide portfolio
of leading brands.”

Megapolis is one of Russia’s leading consumer goods distributors focusing
principally on tobacco and beverages. It employs almost 15,000 employees and
commands a direct store delivery system that reaches more than 150,000 points
of sale. Megapolis handles approximately 70% of the cigarettes sold in Russia
through its distribution agreements with PMI, Japan Tobacco International and
Imperial Tobacco Group.

This announcement is made concurrently with that of Japan Tobacco
International regarding its agreement to also acquire a 20% equity interest in
Megapolis Distribution BV.

Philip Morris International in Russia

At an industry size of 370 billion units in 2012, Russia is the largest
cigarette market outside of the People’s Republic of China. PMI’s 2013
September year-to-date market share, as measured by Nielsen, was 26.1%, driven
by its portfolio of international trademarks, including Marlboro, Parliament,
L&M, Chesterfield and Bond Street, and local trademarks, such as Optima and
Apollo-Soyuz. Most PMI cigarettes sold in Russia are produced at the company’s
state-of-the-art facilities in Krasnodar and near St. Petersburg, which is the
second-largest PMI production facility in the world. PMI has more than 4,500
employees in Russia.

Philip Morris International Inc.

Philip Morris International Inc. (PMI) is the leading international tobacco
company, with seven of the world’s top 15 international brands, including
Marlboro, the number one cigarette brand worldwide. PMI’s products are sold in
more than 180 markets. In 2012, the company held an estimated 16.3% share of
the total international cigarette market outside of the U.S., or 28.8%
excluding the People’s Republic of China and the U.S. For more information,


Philip Morris International Inc.
Investor Relations:
New York: +1 (917) 663 2233
Lausanne: +41 (0)58 242 4666
Lausanne: +41 (0)58 242 4500
Press spacebar to pause and continue. Press esc to stop.