Philip Morris Pakistan to Delist from PSX, Triggers Tax and Investment Shifts

On March 26, 2025, the Board of Directors of Philip Morris (Pakistan) Limited greenlit a plan to voluntarily delist the company’s shares from the Pakistan Stock Exchange (PSX), following rule 5.14 of the PSX Rule Book, which governs such exits. The decision, spearheaded by Philip Morris International (PMI) via its subsidiary Philip Morris Investments B.V. (PMIBV), aims to consolidate ownership, with PMI already holding a commanding 97.65% stake. PMIBV will buy up all remaining shares from minority investors at a price set by PSX and Securities and Exchange Commission of Pakistan (SECP) guidelines.

The company explained that the delisting aligns with PMI’s strategy to tighten its grip on Philip Morris (Pakistan) Limited and streamline operations in the country. By acquiring the minority-held shares, PMIBV will assume full control, offering those investors a chance to cash out at a fair market rate. Philip Morris Brands SARL, another PMI affiliate, will retain its securities post-delisting.

For tax law firms, this move opens a window of opportunity. The buyback process will involve capital gains tax considerations for minority shareholders, requiring precise valuation and compliance with SECP and tax regulations—a prime area for advisory services. The delisting could also shift the company’s tax obligations, as its public-to-private transition might prompt reviews of corporate tax structures or dividend policies, especially with PMI’s long-term expansion goals in Pakistan.

Post-announcement, the stock spiked 10%, climbing Rs67.07 to Rs737.77 by 11:19 AM, reflecting market confidence in the buyout price and PMI’s backing. With a market cap of PKR 45.43 billion and 61.58 million shares outstanding—only 5% or 3.08 million in free float—the deal’s tax and regulatory ripple effects will be significant.

Philip Morris (Pakistan) Limited, a PMI subsidiary since rebranding from Lakson Tobacco Company in 2011, focuses on cigarette and tobacco production. This delisting underscores PMI’s intent to deepen its foothold, potentially reshaping tax planning needs for the firm and its investors as it exits the PSX spotlight.