Croatia''s Adris Says Mulling Possible Partner for Tobacco Arm

Source from:  Reuters 09/24/2014

Croatian tourism, tobacco and insurance group Adris said on Tuesday it may seek a partner for its cigarette-manufacturing arm because rising global competition was hurting the business.

"In the longer term, given the ultimate concentration of the global tobacco industry, we are not able to create significant added value in this segment of our business," Adris said in a statement on the Zagreb bourse in response to media reports speculating about a possible takeover of its tobacco unit.

"We think it is therefore reasonable to consider a possible partnership. The aim, of course, is to keep production and jobs in Croatia," it said.

Adris shares jumped on the news and were up 5.41 percent by 1135 GMT on the Zagreb bourse.

The T-Portal news website reported on Tuesday that Adris's management had decided to sell its tobacco factory TDR by the end of this year.

Quoting "the latest unofficial but reliable information", the portal said Japan Tobacco International was interested in purchasing Croatia's only cigarette manufacturer.

Adris, which has increasingly been focusing on buying and managing Adriatic seaside hotels in recent years, posted a net profit of 390 million kuna ($66 million) last year, down almost 13 percent from a year earlier.

Adris bought Croatia's top insurer Croatia Osiguranje earlier this year for which it paid 905 million kuna with an obligation to boost its capital by 840 million kuna.

T-Portal said the group's tobacco business has been losing ground to big international tobacco companies and its market share in Croatia has shrunk to 60 percent from 80 percent a decade ago. (1 US dollar = 5.9121 Croatian kuna) Enditem