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Swedish Match firm buys US tobacco maker

Vivian Tse · 14 Jan 2011, 17:07

Published: 14 Jan 2011 17:07 GMT+01:00

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Scandinavian Tobacco Group">Scandinavian Tobacco Group (STG), which is 49 percent owned by Swedish Match, will buy Lane, which makes a variety of tobacco products, including Kite and Bugler roll-your-own tobacco and Captain Black pipe tobacco.

"This is an opportunity to maximize the potential of the Lane business and brands under an owner who is focused on the 'other tobacco products' category," Susan M. Ivey, president and CEO of Reynolds American, said in a statement on Friday.

STG is the world's largest pipe tobacco manufacturer, shares the top position in sales of cigars internationally and is a leader in self-rolled tobacco products in Scandinavia.

Lane is expected to contribute $45 million in EBITDA, sales volumes of 525 tonnes of pipe tobacco, 980 tonnes of fine-cut tobacco and 450 million little cigars to STD.

With the acquisition of Lane, STG estimates its annual turnover will be about €800 million (7.18 billion kronor, $1.07 billion). It also estimates it will have sales volumes of more than 2.5 billion cigars, 2,175 tonnes of pipe tobacco, 3,170 tonnes of fine-cut tobacco, and 450 million little cigars.

The company have about 10,000 employees globally after the acquisition, which is subject to anti-trust review and approval by the US Federal Trade Commission. The deal is expected to close in the first half of 2011.

On October 1st, 2010, Swedish Match acquired 49 percent of STG and contributed its US premium and European cigar businesses, as well as its pipe tobacco businesses, to the new entity.

Story continues below…

Stockholm-based Swedish Match makes snus, tobacco, both handmade and machine-made cigars, chewing tobacco, dipping tobacco, matches and lighters.

Vivian Tse (vivian.tse@thelocal.se)

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Your comments about this article

22:44 January 15, 2011 by Maler1971
After all; what would one be without the other?
07:34 January 16, 2011 by UScitizen
A match made in heaven!
11:08 January 16, 2011 by Great Scott
So Swedish company buys US cigarette company, what for, profit. So much for Sweden's clean living, this only promotes smoking even more. Greedy hypocrites, just how can Sweden be asked to be serious?
23:54 January 16, 2011 by dannywh
Er, excuse me Great Scott, but have you ever heard the "Emperor's new clothes" story? Sounds like you need to read some Swedish history before you start calling them hypocrites. It's only the Swedes that take themselves seriously
14:52 January 17, 2011 by markusd
"So Swedish company buys US cigarette company, what for, profit."

Is there some other reason one company would want to buy another?
04:06 January 21, 2011 by repat_xpat
Dannywh, great input. Thanks.

Markusd: The truth is simple, and you speak it. Thank you.

The bottom line is that Swedish tobacco sucks. Virgina tobacco is the best in the World. This is a wise move for those who enjoy quality tobacco (BTW, I don't smoke cigarettes).
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