Philip Morris International (PMI) announced that the court has approved a resolution plan under Canada’s Companies’ Creditors Arrangement Act (CCAA) for Rothmans, Benson & Hedges Inc. (RBH) and its affiliates, including Imperial Tobacco Canada and JTI-Macdonald Corp. The plan resolves all tobacco-related claims and litigation in Canada, concluding years of mediation.

Under the agreement, the companies will pay a global settlement of CAD 32.5 billion (approximately USD 22.7 billion), funded through upfront payments and annual contributions based on their net after-tax income (NATI). RBH will retain CAD 750 million for discretionary use, and PMI, along with its affiliates, will be released from claims related to past tobacco product sales. The settlement structure ensures that alternative product businesses, such as heat-not-burn and nicotine pouches, remain separate from traditional tobacco operations.

Implementation of the plan depends on meeting certain conditions, including exhaustion of appeal rights and finalizing contractual releases. Once effective in 2025, RBH is expected to remain deconsolidated under U.S. GAAP, with potential financial benefits for PMI’s operating cash flow and earnings per share.

PMI continues its transition towards a smoke-free future, having invested over $14 billion in developing smoke-free alternatives. By the end of 2024, its smoke-free products were available in 95 markets, with an estimated 38.6 million adult users. The company aims to expand into wellness and healthcare while maintaining its leadership in reduced-risk nicotine products.