Press releases from Scandinavian Tobacco Group

Skandinavisk Holding will through Scandinavian Tobacco Group form the world’s second largest cigar company and strengthen its position as world leader in pipe tobacco


On 15 January 2010 it was announced that there was an intention to join the business of Scandinavian Tobacco Group (STG) and the cigar and pipe tobacco business of Swedish Match (SM) to form a new worldwide company with focus on cigars and pipe tobacco. The parties have now signed the transaction contract which takes over from the letter of intent.

Skandinavisk Holding (SH) will hold 51% of the shares in the new company, with the remaining 49% of the shares being held by SM. The company will be named Scandinavian Tobacco Group. Jørgen Tandrup, Chairman of SH and the current STG, will become the Chairman of the Supervisory Board and Conny Karlsson, Chairman of SM, will assume the role as Deputy Chairman of the Supervisory Board. Anders Colding Friis, CEO of the existing STG, will become CEO of the new company which will be headquartered in Denmark. Further information on Supervisory Board and Management will be announced in conjunction with the completion of the transaction.

The new company will be a leading player in a number of markets in Europe within cigars and pipe tobacco and will hold about 30%  of the US premium cigar market.

The completion of the transaction is subject to competition authority approvals which are expected to occur during third quarter of 2010.

SH will compensate SM 30 MEUR to account for the majority shareholding and the relative differences in enterprise values on a cash and debt free basis.

The combined entity will have an annual turnover of approximately 690 MEUR and an EBITDA of approximately 140 MEUR and a combined cigar volume of more than 2.5 billion cigars and 1,650 tons of pipe tobacco. The joint company will have approximately 10,000 employees.

“This is a major step towards our ambition to become a world leader in cigars and a leading player in smoking tobacco. The new Scandinavian Tobacco Group will be a truly global company, with an outstanding brand portfolio, increased scale and a much stronger platform from which we can drive growth and profitability,” says Anders Colding Friis, CEO of Scandinavian Tobacco Group.

SH/STG have been advised by FIH PARTNERS (Investment banking), Kromann Reumert (Legal) and PricewaterhouseCoopers (Auditing and tax).

Background information
Skandinavisk Holding (SH) will contribute Scandinavian Tobacco Group (STG) – formerly named Skandinavisk Tobakskompagni – with all its tobacco businesses (cigars, pipe tobacco and fine cut tobacco).

Swedish Match (SM) will contribute all its cigar business (with the exception of its US mass market cigars and the minority stake in the German company Arnold André), as well as its pipe tobacco and accessories business. The combined entity will also distribute lighters and matches in selected markets.

The company’s leading cigar brands will include brands such as Café Crème, Henri Wintermans, Colts and Mercator, among others, from STG, and brands such as La Paz, Macanudo, Partagas (US) and Punch (US) from SM. Leading pipe tobacco brands will include Erinmore, Clan and W.Ø. Larsen from STG and Borkum Riff and Half&Half from SM.

Scandinavian Tobacco Group (STG) produces and sells cigars, pipe tobacco and fine cut tobacco in more than 115 countries around the world and has a number of strong brands. In 2009 the turnover of the group was MDKK 2,400. The group has approximately 3,400 employees and is headquartered in Denmark. See www.st-group.com.

Skandinavisk Holding (SH) is the sole owner of the existing STG. Besides its stake in STG, SH owns a majority share of the daily goods wholesaler Dagrofa a.s. and all of the shares of the furniture business Fritz Hansen A/S. Together with Augustinus Fonden, SH also holds a majority interest in the Copenhagen amusement park Tivoli. The foundations Augustinus Fonden (65%) and Det Obelske Familiefond (35%) are the ultimate shareholders of SH.

Swedish Match (SM) produces and sells market-leading brands in smoke-free tobacco products, cigars, lighters and matches. SM’s global operations generated sales of MSEK 14,204 in 2009. SM has production units in 10 countries and the SM share is listed on the NASDAQ OMX in Stockholm.

For further information, please contact:

Scandinavian Tobacco Group A/S
CEO Anders Colding Friis
(+45) 39 55 62 00