NEW YORK ( TheDeal) -- Philip Morris ( PM) said Tuesday, May 21, it will acquire the remaining 20% stake in its joint venture Philip Morris Mexico SA de CV it does not own for about $700 million. Phillip Morris will acquire the stake from Mexican joint venture partner Grupo Carso SAB de CV. The deal is expected to be completed by Sept. 30, Philip Morris International said, at which time it will own 100% of its Mexican-based tobacco unit. The transaction is subject to approval by the Mexican antitrust authority. The valuation was determined by a pre-agreed formula and could be adjusted based on Philip Morris Mexico's performance over a three-year period, which ends two years after completion of the sale. Phillip Morris International said its share of the total Mexican tax-paid cigarette business is 73.5%, with a volume of 33.6 billion cigarettes. In 2007 Philip Morris International acquired an additional 30% stake in Philip Morris Mexico, a 50-50 joint venture between it and Grupo Carso, for about $1.1 billion. Mexican billionaire tycoon Carlos Slim, one of the world's wealthiest people, founded Grupo Carso and sits on Philip Morris' board of directors. Philip Morris International said its relationship with Slim and Grupo Carso spanned more than three decades. "We would like to express our profound gratitude to Carlos Slim Helú and Grupo Carso, with whom we have built a successful partnership that has positioned PMM as the leading tobacco company in Mexico," Philip Morris International CEO André Calantzopoulos said in the statement announcing the deal. "After more than 30 years of a very successful partnership of great harmony and cooperation that led PMM to continuous market share growth in the Mexican tobacco market, it is now time to leave PMM in the hands of one of the best management teams and organizations in the world, led by Louis C. Camilleri and André Calantzopoulos," Slim said in the statement. Philip Morris International's stock was trading at $94.46 a share in afternoon trading, down about half a percent and near its 52-week-high, giving it a market cap of nearly $155 billion.
New York-based Philip Morris International was spun off by Altria Group ( MO) in 2008, in a $100 billion transaction. That spinoff, however, did not include Philip Morris USA Inc., which is still part of Altria. Philip Morris International's business sells well-known cigarette brands such as Marlboro and Parliament outside of the U.S., with a 16.3% market share in 2012 including China. The company had net revenue of about $77 billion in 2012, approximately $46 billion of which consisted of excise taxes, while it generated about $8.8 billion in net earnings. Written by Richard Collings in New York