Swedish Match AB is a Swedish multinational company headquartered in Stockholm. The company manufactures snus, nicotine pouches, moist snuff, tobacco- and nicotine-free pouch products, chewing tobacco, chew bags, tobacco bits, cigars, matches, lighters, and other fire products with operations in Sweden, Denmark, the United States, the Dominican Republic, Brazil, the Netherlands, and the Philippines. The company's origins can be traced back to 1868, and Ivar Kreuger. Swedish Match has played an important part in Sweden's industrial development.
In May 2022, Philip Morris launched a takeover bid for Swedish Match. Despite some shareholder resistance, by late November 2022 Philip Morris had acquired over 90% ownership, allowing it to begin the compulsory purchase of remaining shares and de-list Swedish Match from the stock market.
History The operations of Swedish Match originate from two companies: Svenska Tobaksmonopolet, a tobacco monopoly owned by the Swedish state and founded in 1915, and Svenska Tändsticks Aktiebolaget (STAB), a match manufacturing company founded in 1917 by Ivar Kreuger (also known as the ”Match King”) in connection with the acquisition of Jönköpings Tändsticksfabrik. In 1992, the tobacco and lights operations were joined in the Procordia Group. Two years later, they were merged into an independent company named Swedish Match, which became publicly listed in 1996.
During parts of its existence, most recently between 2010 and 2015, the company has been headquartered in the so-called Matchstick Palace, commissioned by Ivar Kreuger in the late 1920s.
Svenska Tändsticks AB (STAB) In 1917, Ivar Kreuger founded Svenska Tändsticks Aktiebolaget (STAB) in Jönköping (also known as "City of the matches"). It was a merger between Aktiebolaget Förenade Tändsticksfabriker and Jönköpings & Vulcans Tändsticksfabriksaktiebolag. By expanding through acquisition of government-created monopolies by lending money to the governments, and through mergers with for instance the British match company Bryant and May in 1927, it became the world's largest match manufacturer. A year later, STAB was listed on the Stockholm Stock Exchange. In 1930, the company controlled 60 percent of the world's match production and was the sole owner of match companies in 33 countries.
Following the death of Ivar Kreuger in 1932, the ownership structure in STAB changed and a number of factories were liquidated. During 1938, STAB's share of the world's matchmaking fell to 20 percent. When the match market declined sharply in the 1950s, STAB looked for new business ventures and acquired more than 50 companies between 1968 and 1976.
In 1980, Svenska Tändsticks AB changed its name to Swedish Match to create unity throughout the group. In 1988 the company was acquired by Stora AB and was sold two years later to Nederlight. After another two years, Procordia acquired Swedish Match.
AB Svenska Tobaksmonopolet
In 1915, the Swedish government founded AB Svenska Tobaksmonopolet and nationalized all Swedish tobacco production plants. The monopoly was introduced in order to give the government funds to finance the country's military defense and a new national pension system.
During the 1960s, the monopoly on production, import and sale of tobacco was abolished in Sweden. Svenska Tobaksmonopolet was converted to a new state-owned company named Svenska Tobaks AB. In 1971, the ownership of the tobacco group was transferred to Statsföretag, the Swedish Sovereign Wealth Fund, which in 1984 was renamed Procordia.
As a result of the monopoly being abolished and in order to broaden the market, the Dutch cigar company Elisabeth Bas/La Paz (EBAS), the American tobacco manufacturer Pinkerton Tobacco Company (maker of Red Man, a chewing tobacco brand introduced in the U.S. in 1904) and the Dutch cigar producer Willem II were acquired between 1968 and 1989. In 1989, Procodia was listed on the Stockholm Stock Exchange. Volvo acquired part of Procordia in 1990 and became the principal owner together with the Swedish government. To complement the tobacco business, Procordia, in 1992, acquired the match and lighter company Swedish Match from Nederlight.
Swedish Match AB In 1992, the listed company Procordia acquired the match and lighter business named Swedish Match. The operations of Swedish Match were integrated with Procordia United Brands, one of Procordia's business operations, and was renamed Swedish Match to take advantage of international name recognition. In 1994, Swedish Match functioned as an independent company and was later, in 1996, listed on the OMX Nordic Exchange Stockholm AB and on Nasdaq.
In 1999, the company sold its cigarette manufacturing to Austria Tabak but is still active as a distributor of cigarettes on the Swedish market. In the same year, Swedish Match expanded its cooperation with PT. Java Match Factory (Jamafac), the biggest safety matches manufacturer in Indonesia, to a joint venture agreement in order to strengthen its position within lights and matches in Southeast Asia. Jamafac was divested in 2005 and now has a license agreement with Swedish Match to produce matches and distribute Cricket Lighters in Indonesia.
In 2009, Swedish Match entered an agreement with Philip Morris International and formed the joint venture company SMPM International, with equal stakes owned by each of the two partners, for exploring and developing new markets for snus and other smokefree tobacco products outside Scandinavia and the United States. The collaboration placed test markets in Tel Aviv, Israel; St. Petersburg, Russia; Taiwan; and nationwide Canada. The joint venture was, however, dissolved in 2015.
In 2010, Swedish Match and Scandinavian Tobacco Group (STG) formed a new company specialized in cigars. Swedish Match brought its entire cigar business (with the exception of U.S. mass market cigars) and pipe tobacco into the new company, while STG transferred all of its tobacco business. The new company took over the name Scandinavian Tobacco Group. Swedish Match became a partner with 49 percent of the company, and the remaining shares were owned by Skandinavisk Holding A/S. In 2016, STG became publicly listed, and Swedish Match sold most of its shares in the company.
In 2017, Swedish Match acquired V2 Tobacco, a producer of chew bags and snus, and in 2018, Oliver Twist, a producer of tobacco bits. Both companies are Danish and now fully owned by Swedish Match. Also in 2018, Swedish Match bought a 95 percent stake in the Swedish company Gotlandssnus, which produces snus.
In 2022, Swedish Match's shares hit record high as Philip Morris International (PMI) closed a $16 billion dollar deal with the company. PMI completed the acquisition and eventually delisted Swedish Match.
Operations
Snus, moist snuff, cigars, chewing tobacco, chew bags, tobacco bits, matches and lighters are the main products made by Swedish Match. The company also sells complementary products, such as razors, batteries and light bulbs, on the Brazilian market.
Organization
The organizational structure consists of three divisions, along with corporate functions.
Europe division
The Europe division develops, manufactures, markets and sells snus, nicotine pouches and other smokeless products. The geographic scope is international except North America, with a focus on Europe.
US division
The US Division produces chewing tobacco, cigars, moist snuff and nicotine pouches for the American market. It is also responsible for sales and marketing in the United States.
Lights division
The Lights division manufactures and markets matches and lighters, with production in Brazil, the Netherlands, the Philippines, and Sweden. The main markets are Europe, Asia, Brazil and parts of Africa. The division also sells complementary products, mainly in Brazil.
Operating locations and factories Swedish Match operates in eleven countries and has production units in seven of those: Brazil, Denmark, the Dominican Republic, the Netherlands, the Philippines, Sweden and the US. The company has 15 factories.
The table below presents an overview of Swedish Match's operations as of 2021: Country Activity Factory Number of employees (average) Dominican Republic Production Cigars 3,823 Sweden Head office, production, distribution and sales offices Snus, nicotine pouches, other pouch products and matches 1,352 United States Production and sales offices Chewing tobacco, cigars, moist snuff and nicotine pouches 1,300 Brazil Production and sales offices Lighters and matches 476 The Philippines Production and sales offices Lighters 265 Denmark Production and sales offices Chew bags, tobacco bits and snus 121 Netherlands Production and sales office Lighters 109 Norway Sales offices No 49 Turkey Sales offices No 14 Switzerland Treasury and sales offices No 12 Belgium Public Affairs offices No 2
Production of matches and lightersThe matches produced by Swedish Match are safety matches and are manufactured in Sweden and Brazil. The entity that produces matches in Sweden, Swedish Match Industries AB, is since 2009 certified according to the Forest Stewardship Council chain of custody standard and the standard for controlled wood. The matches are manufactured according to the European match standards EN 1783:1997. 40 percent of the production is sold in Europe and 60 percent to Africa, Central America, The Caribbean, Oceania and the Middle East. The Swedish manufacturing facilities are located in Tidaholm and Vetlanda. In Brazil, 95% of the wood consumption for safety matches and matchboxes is from Swedish Match's own plantations. Swedish Match produces lighters in the Philippines, the Netherlands and Brazil.
Market While today's Swedish Match still produces matches, the majority of its sales and operating profits comes from its smokeless tobacco products such as snus, nicotine pouches, moist snuff and chewing tobacco. In 2021, these smokeless products accounted for 67 percent of sales and 74 percent of Swedish Match's operating profit, whereas matches and lighters accounted for 7 percent of sales and 4 percent of operating profit. Swedish Match's cigars accounted for 26 percent of sales and 23 percent of the operating profit. Swedish Match generates most of its sales in Scandinavia and the US(93 percent of company sales in 2021) but also has a significant worldwide presence through its matches and lighters businesses.
Smokefree products Scandinavia and the US are the primary markets for Swedish Match's smokefree products. The company is market leader in snus in both Sweden and Norway. In 2021, the operating profit for smokefree products (chew bags, tobacco bits, snus, moist snuff, nicotine pouches and chewing tobacco) increased to 5,998 MSEK (5,142 MSEK in 2021). The market for Scandinavian snus and the US moist snuff/snus is approximately 1.745 billion cans per year (345 million cans in Scandinavia and 1.4 billion cans in the US). The snus market in the US is about $175 million, and Swedish Match has about 10 percent of the market.
Cigars