27th Apr 2020 10:53
(Alliance News) - Imperial Brands PLC on Monday said it has agreed to sell its global premium cigars business in two parts for EUR1.23 billion as part of the company's plan to become a "leaner and more agile organisation".
Shares in Imperial Brands were up 3.6% at 1,602.60 pence each in London.
The company, which owns the Davidoff and Winston cigarette brands, has agreed to sell its cigars business to an investment consortium of individual investors in two separate transactions: one for the US business and another for the Rest of the World business.
The FTSE 100-listed company has agreed to sell Premium Cigar USA to Gemstone Investment Holding Ltd for EUR185 million.
The US business includes assets and property of cigars distributor Altadis USA, online retail platforms JR Cigar, cigar.com and Serious Cigars, and a specialist brick-and-mortar retailer, Casa de Montecristo, with 28 stores across the US.
Allied Cigar Corp SL will acquire the company's Rest of the World cigars business for EUR1.04 billion.
The Rest of the World business includes a 50% stake in Cuban cigar manufacturers and distributors Habanos SA, Altabana SL, Internacional Cubana de Tabaco SA, Promotora de Cigarros, SL. It also includes non-Cuban premium handmade cigar sales operations outside the US, including Vegafina brand, and cigar manufacturing facilities in Honduras and Dominican Republic.
Imperial Brands plans to use proceeds to cut debt. The transactions are expected to close in the third quarter of 2020.
The cigars business contributed GBP80 million to pretax profit of Imperial Brands in the year to September 30, 2019, and Imperial said the pro-forma earnings dilution to that year's results from the disposal is 6 pence per share. The company reported basic earnings per share of 106.00p and adjusted EPS of 273.3p in financial 2019.
Joint Interim Chief Executives Dominic Brisby and Joerg Biebernick said: "This disposal reinforces our strategic ambition of becoming a leaner and more agile organisation and the proceeds will realise value for shareholders by reducing debt as part of our ongoing focus on active capital management."
By Tapan Panchal; [email protected]
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