Imperial's Davis Rarely Snookered for a Deal

Source from:  LONDON, July 18 (Reuters) 07/19/2007

Gareth Davis is a committed smoker even to the point that a cigarette and a glass of red wine caused him to miss the rare spectacle of a streaker baring all at a World Snooker Championship final. The Imperial Tobacco Group Plc (IMT.L: Quote, Profile , Research) chief executive missed that famous TV shot at an event sponsored by his favoured Embassy cigarette brand. But he has rarely been snookered in a lifetime career in the tobacco industry in which he has transformed Imperial into a global player. On Wednesday, Davis, 57, announced Imperial had agreed to take over Franco-Spanish rival Altadis (ALT.MC: Quote, Profile , Research) (ALDS.PA: Quote, Profile , Research) for 50 euros a share, or 12.6 billion pounds before debt and minority interests, to cement Imperial's position as the world's No 4. It was at the 2004 snooker championships that he failed to spot the streaker while he was in the hospitality area enjoying a glass of red wine and his beloved Embassy, but he has not missed a trick over 11 years leading Imperial in several acquisitions. In his 35-year career at Imperial, he has seen the maker of Embassy, Lambert & Butler and Superking cigarettes transformed from a domestic producer making most of its profit in the north of England to be a key player in a global tobacco industry. Even his competitors grudgingly admit Davis has an excellent record on acquisitions over the last decade covering Rizla cigarette papers, Dutch Van Nelle hand-rolling tobacco, Germany's Reemtsma in 2002 and culminating with Altadis. "He's grown the business continuously and always delivers on acquisitions and cost savings. That's why he gets such good support from his shareholders," said an executive from a rival, who asked not to be named. Davis is a true tobacco man, always looking to endorse his company's product, keen to light up during interviews and after lunch. Has he ever thought of giving up his Embassy? "Never, I enjoy it too much," he has said. He had wanted a big deal ahead of his formal retirement date in May 2010 when he turns 60 and Altadis could be that deal to put him within reach of the big three - Marlboro-making Altria (MO.N: Quote, Profile , Research), London-based British American Tobacco (BATS.L: Quote, Profile , Research) and Japan Tobacco (2914.T: Quote, NEWS , Research) which earlier this year took over Imperial's arch domestic rival Gallaher. Davis joined Imperial from university in 1972, holding various manufacturing roles until Lord Hanson bought the company in 1986 and Davis was sent to Nottingham to be managing director of its international operations. Then, overseas markets for Imperial meant Spain, the channel island of Jersey and a bit of the Middle East but Davis set about boosting sales and now over three-quarters of Imperial's sales come from outside its British home market. He was appointed chief executive in March 1996, led the demerger from the sprawling Hanson empire in October of that year and embarked on a series of acquisitions to put Imperial on a faster growth path than its British rival Gallaher. He started with Rizla cigarette papers in 1997, and followed it with Dutch Van Nelle hand-rolling tobacco business in 1998 and then BAT's Australian business the following year. In 2001, Imperial took on the UK distribution of Altria's Marlboro brands and 2002 saw his biggest deal for Reemtsma at 5.8 billion euros. In Britain, which still accounts for just over one third of profits, he has built up a leading market share of over 46 percent and has held its market share at around 20 percent in its second-biggest market, Germany, despite big tax hikes. He has been keen to expand outside Europe buying U.S. group Commonwealth Brands for $1.9 billion in February and in March announced the building of a plant in Taiwan costing 45 million pounds to give the group an Asian manufacturing base. Altadis will give Imperial a continental European flavour with strong positions in France and Spain, and even further south into Morocco and adding Montecristo Cuban cigars, but then it was Davis who made Imperial an international tobacco player in the first place. Enditem