March 13 (Bloomberg) -- Philip Morris International Inc. named Andre Calantzopoulos as chief executive officer, replacing Louis Camilleri, as the world’s largest publicly traded tobacco company works to expand in China and develop new products.
Calantzopoulos, who also was nominated for election to the board, will become CEO after the annual meeting of shareholders on May 8, the New York-based maker of Marlboro cigarettes said today in a statement. Camilleri will remain chairman of the board, Philip Morris said.
Calantzopoulos, 55, takes charge five years after Philip Morris was spun off from Altria Group Inc., enabling it to accelerate acquisitions and expand into emerging markets. He and Camilleri introduced new varieties of Marlboro into Russia, the world’s second-largest cigarette market, to boost its global share of tobacco sales to a record 28.8 percent last year, excluding the U.S. and China.
“The move recognizes the increasing role that Andre has played after he and Louie worked together to gain market share,” said Tom Russo, a partner at Gardner Russo & Gardner, who oversees more than $6 billion, including about eight million Philip Morris shares.
Philip Morris fell 0.4 percent to $90.55 at the close in New York. The shares have risen 8.3 percent this year.
As executive chairman, Camilleri, 58, will have more time to focus on “the big imponderables” for the company, such as boosting sales in China and developing next-generation products less harmful than cigarettes, Russo said today by telephone from Lancaster, Pennsylvania.
He will give up the day-to-day responsibilities for “stacking high and selling more” cigarettes that he has shared with Calantzopoulos, Russo said. “I’m glad we get to keep both.”
Camilleri has served as CEO of Philip Morris and its former parent for 11 years. The shares have jumped 83 percent since March 17, 2008, when Philip Morris was spun off, compared with a 22 percent gain for the Standard & Poor’s 500 Index.
Camilleri said at a Morgan Stanley conference in November that China and Vietnam represent “untapped growth opportunities” and an “exciting future of next generation products.”
China is world’s largest tobacco consumer. Cigarette sales in China will expand an average of 13.5 percent a year to reach 2 trillion yuan ($321 billion) by 2016, according to London-based Euromonitor International.
The company’s sales tumbled in Europe in the fourth quarter as the region’s debt crisis and high unemployment prompted smokers to cut back or switch to roll-your-own-smokes.
Calantzopoulos has served as Philip Morris’s chief operating officer since 2008. He joined the company in 1985, working across Central Europe, and became CEO of the international division in 2002.
The company has boosted its dividend each year for a total increase of 85 percent from the spinoff through year-end 2012. It has returned more than $50 billion to shareholders in dividends and stock buybacks during that period, according to the statement.
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