For a slow-growth industry, the tobacco sector has been busy recently. The biggest players have been taking advantage of their size to acquire smaller rivals and emerging products that could threaten their core fran chises even in a small way.
British American Tobacco
The purchase positions British American as the second-ranked tobacco company in the nation, behind Philip Morris. Emerging markets such as Colombia represent a good growth opportunity for established tobacco companies, which are facing significant pressures in developed markets.
Philip Morris has been on its own acquisition path, despite the setback. The company has purchased the global patent rights to a technology that delivers nicotine to the lungs without smoking. The company will work with the technology's developer to create a commercially viable product, but don't expect anything soon. The company said it could take a few years before a product becomes available.
Philip Morris, British American, and Reynolds American
A similar trend has been playing out in oral tobacco, as players such as Reynolds and Altria
Another player, Star Scientific
Jim Royal, Ph.D., owns shares of Philip Morris. The Motley Fool owns shares of Philip Morris International and Altria. Motley Fool newsletter services have recommended buying shares of Philip Morris International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.