Regional China Tobacco Industry Corporations Sign Pact on Merger

Source from:  Guangdong China Tobacco Industry News newspaper 06/10/2008

Guangdong Provincial China Tobacco Industry Corporation in south China's Guangdong Province and Guangxi Regional China Tobacco Industry Corporation in southwest China's Guangxi Region - the operators of the tobacco industries in their respective regions - signed an agreement on interregional merger in Guangdong's provincial capital city Guangzhou on May 16. Following the merger, China National Tobacco Corporation will hold a controlling stake in the new entity to be established, while the two parties to the agreement on merger will each hold shares in the other. It was the first agreement on interregional merger of provincial-level China Tobacco Industry Corporations, which will go into effect after review and approval by the State Tobacco Monopoly Administration - the regulator of China's tobacco industry. Interregional merger among tobacco manufacturers is part of strategic reorganization of China's tobacco industry at a higher level, and its reform of the structure of resources at a higher level. The current process of merger between Guangdong Provincial China Tobacco Industry Corporation and Guangxi Regional China Tobacco Industry Corporation is conducted under the guidance of the STMA, and extensive consensus reached through sufficient consultation between the two sides on reform of the structure of resources, reorganization of cigarette brands and other important matters that are capable of impacting their long-term development, under the principles of following the leadership of China National Tobacco Corporation, taking the market as the basis, and taking the development of brands as the mainstay business. Following the merger, the two sides will focus their energy on the development of big competitive cigarette brands, strengthen coordination in marketing and jointly promote the sales of each other's brands in their respective regions. They will also strengthen the exchange of opinions on economic operation, monetary information, corporate culture development, brands development, etc, in jointly promoting common business development and the development of a harmonious tobacco industry. Enditem