But Swisher would also make a nice prize for other companies, such as the soon-to-be-independent Lorillard tobacco concern, maker of Newport, Kent and True cigarettes. Other targets could include Swiss-based Davidoff of Geneva or Swedish Match (parent of General Cigar).

And once these tobacco giants absorb the leading cigar companies, will they also follow the lead of Altadis, S.A. and General Cigar, which purchased national retailers J-R Cigars and Cigars International, respectively? Famous Smoke Shop, Holt’s or Mike’s Cigars could be targets if a direct-to-consumer marketing line is considered desirable.

One aspect of these possible acquisitions that should not be underestimated in considering the strategic future of cigars is that as the leading cigar companies are merged into major cigarette makers, the current argument that cigars and cigarettes are fundamentally different products and should be treated differently as to taxation and availability will be harder to make. Once the “big tobacco” companies are the ones profiting from cigar sales, politicians will be less likely to consider them different from cigarettes, despite the different nature of their distribution and sales.

Altadis agrees to further takeover procedures:
At a special shareholders meeting of Altadis, S.A., an overwhelming majority agreed to modify a company bylaw, enabling the acquisition of the company by Britain’s Imperial Tobacco to move forward.

The vote removed a “limit of the number of votes that each Altadis shareholder can place during the General Meeting” according to a statement on the Altadis Web site. This was a change which was required by Imperial in its offer for Altadis and had to be accomplished prior to the sale.

Altadis Executive Committee chair Antonio Vazquez noted during an address that “The Company’s share price has increased from €14.20 per share at the end of 1999 to €50 per share as offered by Imperial Tobacco, with an average annual appreciation of more than 17%, in addition to the return received by shareholders through one of the sector’s most generous dividend policies.” That’s a good return indeed.

Once the deal is completed, which is scheduled for January, Imperial will become the world’s fourth-largest tobacco company, behind only Altria (Philip Morris), British-American Tobacco and Japan Tobacco.
~ Rich Perelman

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