Tuesday January 22, 01:45 PM
Imperial Tobacco wins control of Altadis
By Roland Jackson
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LONDON (AFP) - A new tobacco giant incorporating well-known brands Regal cigarettes and Montecristo cigars emerged Tuesday as Britain's Imperial Tobacco (LSE: IMT.L - news) won control of Franco-Spanish peer Altadis (Madrid: ALT.MC - news) .
Imperial said in a statement that Altadis shareholders overwhelmingly backed its takeover bid for Altadis worth 12.8 billion euros (18.8 billion dollars).
The takeover will create Europe's second-largest tobacco company, behind Altria Group (NYSE: MO - news) 's Philip Morris, making about 312 billion cigarettes a year.
The combination of the world's fourth and fifth biggest tobacco groups will bring together Imperial Tobacco brands Regal, Embassy and Davidoff, with Altadis' Montecristo and Gauloises.
Imperial Tobacco said shareholders representing 93.5 percent of Altadis stock had agreed to the tie-up.
"The level of acceptances ... is such as to satisfy the 80-percent minimum acceptance condition to the offer," Imperial said in the statement.
"Accordingly, the offer has become unconditional."
After completion of the purchase, Imperial Tobacco will remain the fourth biggest tobacco company in the world, after Philip Morris, British American Tobacco (LSE: BMTF.L - news) and Japan Tobacco (Berlin: JAT.BE - news) .
Although tobacco companies are thriving in Asia and eastern Europe, they are struggling with market share in western Europe owing to countries including Britain, France and Ireland banning smoking in public places.
Imperial added Tuesday that Altadis shares would be de-listed after the group has snapped up the remaining stock at the offer price of 50 euros per share.
It was expected that the Spanish Securities and Exchange Commission would announce the final result of the offer on January 25.
Altadis management agreed to the Imperial Tobacco takeover in July 2007 after spurning two previous bids from the London-listed group. Imperial's own shareholders voted in favour of the takeover last year.
Last October the European Commission approved the takeover on condition that Imperial give up some of its rolling and pipe tobacco and cigar brands, a stipulation it accepted.
The EU's executive body said the new entity would have had too large a stranglehold on the markets for rolling tobacco in France, Italy, Portugal and Spain, and in pipe tobacco in Finland and France, and cigars in Greece
In each case, the British firm agreed to give up one or several brands to appease Brussels' competition concerns.
Last year, Imperial Tobacco bought US group Commonwealth Brands, the fourth-biggest player in the United States, for 1.9 billion dollars.
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