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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).

For further information, please contact:

Scandinavian Tobacco Group A/S

CEO Anders Colding Friis

(+45) 39 55 62 00


- 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

CVR 31 08 01 85

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