Genuine Scandinavian cigars.
An agreement to form a new cigar focused company has been signed by Swedish Match and Scandinavian Tobacco Group.

The new company will have marketing share muscle in U.S. premium cigars and European cigars, and it will grasp major chunks in a number of other markets. Leading cigar brands will include Macanudo, Partagas (U.S.), Punch (US) and La Paz, among others, from Swedish Match as well as Café Crème, Henri Wintermans, Colts, and Mercator, among others, from STG. Leading pipe tobacco brands will, among others, include Borkum Riff and Half & Half from Swedish Match and Erinmore, Clan, and W.Ø. Larsen from STG.

Based on the Swedish Match and STG 2009 full year results, the new company would have had an annual turnover of approximately €690 million ($918 million), earnings of approximately €140 million ($186 million), and a volume of more than 2.5 billion cigars.

Swedish Match will contribute its entire cigar business with the exception of U.S. mass market cigars, and will contribute its remaining pipe tobacco and accessories businesses. STG will transfer all of its tobacco businesses (cigars, pipe tobacco and fine cut tobacco) into the new company. The new company will also include distribution of lighters and matches supplied by Swedish Match in relevant markets.

“This is a major step toward our ambition to leverage our combined skills in the global cigar and pipe tobacco industry. By creating this value enhancing business platform with worldwide reach, we are better positioned to drive growth, profitability and long term shareholder value,” said Lars Dahlgren, President and CEO of Swedish Match AB.

STG is headquartered in Denmark with production facilities in Belgium, the Netherlands, Denmark, Indonesia, the Dominican Republic, Nicaragua and Honduras. Swedish Match will hold 49% of the shares in the new company, with the remaining 51% of the shares to be held by STG’s shareholders. Jørgen Tandrup, currently Chairman of STG, will become the Chairman of the Board and Conny Karlsson, Chairman of the Board of Swedish Match will assume the role as deputy Chairman for the new company. Anders Colding-Friis, CEO of STG, will be the CEO of the new company.

STG will compensate Swedish Match with €30 million ($40 million) to account for the shareholding and the relative differences in enterprise values on a cash and debt free basis.
Source: www.swedishmatch.com