By Elena Vardon


The Canadian units of several international tobacco groups are close to paying 32.5 billion Canadian dollars ($23.55 billion) to settle a decades-old litigation as part of a plan proposed by a court-appointed mediator.

Philip Morris International--whose subsidiary Rothmans, Benson & Hedges is involved in the lawsuit--said on Friday that the allocation of the settlement amount between its unit and those of British American Tobacco and Japan Tobacco is still unresolved.

The long-running case stretches back to 1998 and went to trial in 2012, with a Canadian court ordering the units to pay billions of dollars in damages to Quebec smokers and former smokers in 2015. More than one million people were represented in class-action suits claiming cigarette makers should be held responsible for selling a harmful product and obscuring the health effects of smoking.

The three subsidiaries were put in bankruptcy protection in 2019.

British American Tobacco's unit Imperial Tobacco Canada, or ITCAN, has been negotiating a possible settlement since then, while continuing to run its operations, the London-listed group said in a separate statement.

If approved and implemented, the proposed plan will see Rothmans, Benson & Hedges, ITCAN and JTI-Macdonald--Japan Tobacco's unit--pay out part of the amount upfront in cash alongside annual payments based on a percentage of their future sales, PMI said. The plan was filed in the Ontario Superior Court of Justice.

"The plan resolves all Canadian tobacco litigation and provides a full and comprehensive release to Imperial, [British American Tobacco] and all related entities for all tobacco claims," ITCAN said, adding that it is supportive of the settlement and hopes that a comprehensive outcome can be achieved quickly.

Shares in British American Tobacco fell more than 3% in afternoon trading in London.

JTI-Macdonald said it has been actively engaged in the process and is committed to continue to work with all the parties to reach a compromise. "There are certain critical issues that would need to be resolved if we are to find a settlement plan that is workable," a spokesperson said.

"After years of mediation, we welcome this important step towards the resolution of long-pending tobacco product-related litigation in Canada," Philip Morris's Chief Executive Jacek Olczak said.


Write to Elena Vardon at elena.vardon@wsj.com


(END) Dow Jones Newswires

10-18-24 0914ET