By Adriano Marchese

Philip Morris's Canadian affiliate, Rothmans, Benson & Hedges, along with other major tobacco brands, will pay 32.5 billion Canadian dollars ($22.73 billion) to settle all smoking-related lawsuits in Canada.

The Stamford, Conn., tobacco major said Friday that the allocation of the settlement amount between its unit and those of British American Tobacco and Japan Tobacco has been resolved. The massive sum will be paid over time, with some money coming from profit on traditional tobacco products.

For Philip Morris, the court in the Creditors Arrangement Act proceeding approved a plan of compromise and arrangement for Rothmans, Benson & Hedges that will allow it to retain C$750 million in accumulated cash.

The settlement, which will be funded through upfront payments and a share of future profits from traditional tobacco products, allows the affiliates to keep alternative nicotine products--such as e-cigarettes and heated tobacco--outside of the agreement.

The long-running case began in 1998 and went to trial in 2012. A few years later, a Canadian court ordered the tobacco companies to pay billions of dollars in damages to Quebec smokers and former smokers.

Over one million people were represented in class-action suits against the tobacco companies claiming cigarette makers should be held responsible for selling a harmful product and obscuring the health effects of smoking.

Part of the settlement will also include a number of operating rules and restrictions on how the companies can run their traditional cigarette business until the settlement amount is paid off.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

March 07, 2025 08:47 ET (13:47 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.