BAT-Imperial deal ‘likely’

Wells Fargo Securities believes a deal between British American Tobacco (BAT) and Imperial Tobacco Group (ITG) is “very probable,” based on a detailed market share and leverage analysis it performed.

The most likely scenario, according to the financial services firm, is that BAT acquires Imperial but divests its U.S. assets, ITG Brands, in a tax-free spin-off to shareholders, and sells some of the companies’ brands in certain markets to address anti-trust concerns.

Wells Fargo believes Philip Morris could play a key role in this transaction since it would likely be interested in brands such as Davidoff.

Neither PM nor JTI would be interested in buying ITG, according to Wells Fargo.

The firm believes ITG Brands could be valued at as much as $12 billion.

A BAT-Imperial deal would result in a stronger, more rational global competitive environment, according to the bank, ultimately driving better industry pricing.

British cigarette branding plan retains

The British authorities is still looking at banning branding on cigarette packages despite the fact that it disregarded recommendations from its legislative agenda presented in parliament on Wednesday, Prime Minister David Cameron said. Britain had seemed to become the first European nation to make tobacco companies to remove brand names and to use standardized packaging,

BAT sales up 5 pct, driven by global brands

British American Tobacco, the producer of Dunhill, Kent and Lucky Strike cigarettes, reported revenue growth of 5 percent at constant rates of exchange in the first quarter ended March 31, adding that global drive brand cigarette volumes grew by 1 percent.
The report stated:

• Revenue growth of 1 percent at current rates of exchange.
• Cigarette volumes from subsidiaries fell 3.7 percent to 160 billion, with a decrease of 3.4 percent for total tobacco volumes.
• Board confident of another year of earnings growth in line with long term strategic goals.
• Pricing environment remains strong despite difficult trading conditions in many parts of the world, notably southern Europe.
• If current exchange rates persist for the rest of the year, the currency headwind that adversely impacted the quarter will reverse.
• Group has sufficient financing and facilities available for the foreseeable future.
• There have been no material events, transactions or changes in the financial position of the Group since the year end.
• -Shares closed Wednesday at 3548 pence valuing the company at £68.25 billion.

Australians Face Gangrene Photos as Tobacco Brands Vanish

Australians purchasing smokes are now assured to deal with warnings that consist of pictures of a gangrenous limb and a cancer victim as the world’s first law demanding tobacco sales in standard packages comes into effect. Starting with December 1, all cigarettes in Australia have to be sold in the standard drab brown packs, with

Big Tobacco accused of new smokescreen

Cigarette firms have been taken down once again over their absence of compliance with new plain packaging regulations just day before the law becomes operational. Health Minister Tanya Plibersek is requiring two industry giants – Imperial Tobacco and British American Tobacco – take away ringed watermarking from their cigarette paper that seem to make their

BAT Nine-Month Cigarette Shipments Fall on Europe and Brazil

British American Tobacco Plc, the biggest tobacco company in Europe, reported that shipments dropped during the first nine months of the year due to lower cigarette consumption in Brazil and Western Europe. The amount of cigarettes marketed decreased to 517 billion from 523 billion in 2011. Shipments in Western Europe dropped 5%, whilst volume declined

Value of the worldwide tobacco market continues to grow

Global marketplace The worldwide tobacco market is appreciated at around £450 billion and the industry creates about 5.5 trillion cigarettes per year. While cigarette sales in developed countries keep on to drop a little bit year on year, total global market drops are demonstrating signs of moderating. Current developments reveal that individual smokers will consume