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Acquisition of Pipe Tobacco Retailer to Fuel US Growth

Press / Apr 23, 2013

Scandinavian Tobacco Group A/S acquires the catalogue and internet business PipesandCigars.com. The company is the leading catalogue and internet provider of pipe tobacco, pipes and accessories and has grown its business in a declining US market for traditional pipe tobacco.

The acquisition is made through the Group’s subsidiary, Cigars International, which is the market leading online marketer of cigars in the US. Cigars International shows double-digit growth rates in a flat market for cigars by gaining market share and outpacing the industry.

President for Cigars International, Craig Reynolds, says:

“We carry more than 750 different brands within primarily cigars. We have a state of the art distribution center for tobacco products. Today, we primarily carry cigars. With the acquisition we add this resource to PipesandCigars.com, offering improved customer service, faster shipping and reduced fees on expedited shipping. As our track record shows, we have been successful in offering our customers a wide variety of different cigar brands and thereby smoking experiences.  We will be applying the same passion, dedication and commitment to pipe tobacco, pipes and pipe accessories.”

“In 2012, we tested the market for traditional pipe tobacco by offering a wide portfolio of pipe tobacco brands on the Cigars International website. The products were welcomed by pipe smokers, and we were very pleased with the outcome. Together with PipesandCigars.com, we want to take advantage of the synergies, fuelling growth in both PipesandCigars.com and Cigars International.”

Further information, please contact:

President for Cigars International Craig Reynolds or director of Group Communications, Kaspar Bach: Kaspar.bach@st-group.com or phone +45 7220 7152.

About PipesandCigars and Cigars International

PipeandCigars was founded in 1999 as a small retailer New York State. Cigars International was established in 1996. Today, Cigars International is comprised of 250 employees and the industry-leading online and catalogue marketer of fine, handmade cigars, gifts and accessories. The company owns and operates three industry-leading retail locations throughout Pennsylvania. Cigars International is a subsidiary of Scandinavian Tobacco Group A/S.

About Scandinavian Tobacco Group

- a world leading manufacturer of cigars and traditional pipe tobacco

- approx. 8,200 employees in the Dominican Republic, Honduras, Nicaragua, Indonesia, Europe, New Zealand, Australia, Canada and the US

The Group’s brand portfolio contains more than 200 international, regional and local tobacco brands, including the cigar brands Café Crème, La Paz, Henri Wintermans, Macanudo, CAO, Partagas (US) and Cohiba (US). Pipe tobacco brands include Captain Black, Erinmore, Borkum Riff and W.Ø. Larsen, while leading fine-cut tobacco brands include Bugler, Break, Escort, Bali Shag and Tiedemanns.

The Group is ultimately owned by two Danish foundations (51%) – the Augustinus Foundation and Det Obelske Familiefond – and by Swedish Match (49%). Both Danish foundations have been active in the tobacco industry for more than 250 years. Swedish Match is a publicly owned company listed on the Stockholm Stock Exchange.

Read more: www.st-group.com.

Scandinavian Tobacco Group A/S
Sydmarken 42
DK-2860 Søborg
Denmark

CVR 31 08 01 85