Danish Group to Sell Cigarette Business to British American Tobacco

Source from:  earthtimes.org Copenhagen Thu, 28 Feb 2008  02/29/2008

Danish-based Scandinavian Tobacco Group on Thursday said it would sell its cigarette activities to British American Tobacco (BAT) in a deal worth 2.7 billion euros (4 billion dollars). BAT would acquire the companies House of Prince in Demark, JL Tiedemanns Tobaksfabrik in Norway and Fiedler & Lundgren in Sweden by paying the equivalent of 1.5 billion euros in cash and selling its 32-per-cent stake in Scandinavian Tobacco for 1.2 billion euros, the groups said in statements issued in London and Copenhagen. Scandinavian Tobacco Group companies account for some 60 per cent of cigarette sales in Scandinavia, while snuff maker Fiedler & Lundgren has about 6 and 4 per cent of the Swedish and Norwegian snuff market, respectively. The group also produces roll-your-own tobacco products, pipe tobacco and cigars. As a "regional player" Scandinavian Tobacco Group has experienced "considerable pressure on the business" over the international consolidation of the market for cigarettes and roll-your-own products, Group chairman Jorgen Tandrup said in a statement. The deal hinged on approval from competition authorities. Majority owner of Scandinavian Tobacco, Scandinavian Holding, currently has a 65-per-cent stake in the group. In future, Scandinavian Tobacco Group said it would focus on sales of cigars and pipe tobacco. Enditem