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Los Angeles – European regulators have
approved the $3.9 billion (U.S.) sale of the
cigarette businesses of Danish tobacco firm Skandinavisk
Tobakskompagni A.S. to British
American Tobacco (BAT), with some minor
conditions.
The deal will require BAT to sell off some roll-your-own
brands in Norway to satisfy the European Union
regulators, but it will leave Skandinavisk Tobakskompagni – better
known as ST – with $3.9 billion in cash
and a nice cigar business to build on.
ST owns Henri Wintermans, a
dominant player in small cigars (1.3 billion
sold annually!), as well as Nashville-based C.A.O
Cigars, which not only markets its own
blends, but is also the distributor for Torano
Cigars and for the Dunhill Dominican and Dunhill
Signed Range brands. Time to buy some
cigar companies?
What about Swedish Match? Noting
that Imperial Tobacco paid 14.2 times the 2006
earnings of Altadis, S.A. for
a $22.3 billion purchase price, using the same
multiplier on Swedish Match, based on 2007 earnings
(about $494.1 million U.S.), the price would
be $7.02 billion. Even after using the proceeds
from the sale to BAT, that’s probably too
rich for ST since it would have to finance the
rest of the purchase.
That leaves possibilities which are much smaller
in size, but equally interesting, including assembling
a new, super-cigar company to challenge Imperial’s
Altadis division, Swedish Match and Davidoff
of Geneva. Imagine putting together
a powerhouse that started with Henri Wintermans
and C.A.O. – whose manufacturing is done
primarily in Honduras and Nicaragua – with
a Dominican powerhouse like La Aurora or MATASA?
It’s worth noting that the C.A.O. Vision
line is already made at La Aurora and the La
Aurora and Leon Jimenes brands
already have a strong international presence
in duty-free shops as does Henri Wintermans.
Or perhaps an even bolder stroke, in buying
the Tabacalera A. Fuente and
the J.C. Newman Cigar Company?
>> The well-respected Tatiana brand
of flavored cigars will introduce a new series
called Mocha at the upcoming
IPCPR convention and trade show in Las Vegas.
The new blend will feature a Sumatra wrapper
and Honduran-grown binder and filler leaves,
with the flavor infused into the tobacco prior
to the time it is rolled into cigars. Three sizes
will be offered, all to be box-pressed and available
in boxes of 25.
>> Short fillers: A new study conducted
at UCLA indicates that "Tobacco smokers
who eat three servings of fruits and vegetables
pe day and drink green or black tea may be protecting
themselves for lung cancer." UCLA researchers
found that smokers who ingested high levels of
natural chemicals called flavonoids in their
diet had a lower risk of developing lung cancer,
an important finding since more than 90% of lung
cancers are caused by tobacco smoking. Lead researcher Dr.
Zuo-Feng Zhang said the study reviewed
the diets of 558 people with lung cancer and
837 people who did not have the disease. The
findings showed that eating strawberries, apples,
beans, onions and Brussels sprouts and drinking
green or black teas were the most effective in
providing certain flavonoids (water-soluble plant
pigments) that counteract damage to tissues .
. . find our latest tasting review, of the four
blends of the boutique Padilla lines,
in our News & Views archives for July 4.
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Heard in the Humidor is a
publication of Perelman, Pioneer & Company of
Los Angeles, California, USA. Copyright 2007;
All rights reserved.
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