8 February 2007

Acquisition of Commonwealth Brands

Imperial Tobacco Group PLC today announced that it has agreed to acquire 100 per cent of CBHC Inc, which trades as Commonwealth Brands, from Houchens Industries Inc for a total cash consideration of $1.9 billion (Ł974 million). After taking into account the net present value of tax benefits arising as a result of the deal, the net cost of the acquisition is $1.5 billion (Ł769 million). In the year to 30 September 2006, Commonwealth Brands generated earnings before interest, tax, depreciation and amortization (EBITDA) of $174 million (Ł89 million).

The Group anticipates that the acquisition will be completed by April 2007.

Commonwealth Brands is based in Bowling Green, Kentucky and is the fourth largest cigarette manufacturer in the United States of America, with 3.7 per cent of the 376 billion US cigarette market. Commonwealth Brands employs around 720 people, including a sizeable sales force with excellent trade relationships nationwide, and has a factory which currently manufactures around 14 billion cigarettes a year but has the capacity for 30 billion cigarettes a year.

Download the full text of the Announcement here.