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Imperial Tobacco to sell roll-your-own brands to win EU approval
Imperial, the fourth-largest tobacco company makes West cigarettes, Rizla cigarette papers and roll-your-own tobacco brands Drum, Golden Virginia and Van...
Britain’s Imperial Tobacco Group PLC won EU approval Thursday to take over Spanish tobacco company Altadis SA, but has agreed sell off some European tobacco brands to eliminate antitrust worries.
The European Commission said it had cleared the deal — which values Altadis at €16.2 billion (US$22.3 billion)_ but this was conditional on Imperial offloading brands of roll-your-own tobacco sold in France, Italy, Portugal and Spain; pipe tobacco in Finland and France; and cigars in Greece.
Regulators said their investigation had showed that the combined company "would have significant market shares" for these products but the selloffs would prevent Imperial gaining ground.
Imperial, the fourth-largest tobacco company makes West cigarettes, Rizla cigarette papers and roll-your-own tobacco brands Drum, Golden Virginia and Van Nelle.In July, it finally won over Altadis, the manufacturer of Gauloises, Gitanes and Ducados cigarette brands, after the company rejected previous overtures as undervaluing the business.
Altadis is the world’s leading cigar distributor through its 50-50 venture with the Cuban state-owned cigar company Habanos SA that produces most handmade cigars.The EU’s executive arm said overlaps between Imperial and Altadis were limited and it would continue to face competition from several strong effective competitors such as Philip Morris, British American Tobacco and Japan Tobacco, which recently bought Gallaher.
It also looked at Altadis’ control over wholesale distribution in France, Italy and Spain but said it would have neither the ability nor the incentive to restrict rivals’ access to distribution channels and the combination would have no negative impact on customers because distribution costs are such a small part of the final tobacco price.
Nor would Altadis be able to block access to the airport retail outlets it controls jointly with Italy’s Autogrill, the EU said, since this would not be in Autogrill’s interests.
Top 10 online cigarettes news on Wednesday, February 8, 2012 22:11:18
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- many as 22 percent of Saudis smoke cigarettes with 25 percent of them suffering from diabetes and 15 to 20 percent experiencing high blood pressure.
- The Squaxin Island tribe, which became the first in the West to manufacture its own tobacco products in 2005, is set to expand its venture from coast to coast.
- Countries including the United Kingdom, Australia, and Canada currently restrict candy cigarette sales.
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