PRESS ANNOUNCEMENT 22 DECEMBER 19943
BAT ACQUISMON OF ANERICAN TOBACCO CLEARED
B.A.T Industries and the United States Federal Trade Commission have reached a
settlement which enables BATs US$1 billion acquisition of American Tobacco
Company to be closed without any fin-ther delay. 'Me FTC has withdrawn its
opposition to the acquisition in exchange for certain undertakings. after which
Brown & Williamsoifs sham will increase from I I per cent to about 17 per cent.
BAT has agreed to divest Montclair, an American Tobacco value-for-money brand.
together with certain of their other minor discount brands, as well as offering
Tare.vton. a full revenue brand. to the acquirer. These sales will be made at fair
market value within about 12 months and will only apply to the US market, with
BAT retaining the international ownership of the brands. BAT is also required to
make American Tobacco's Reidsville cigarette manufacturing facility available to
the brands'purchaser.
As a result of the acquisition, BAT currently estimates that there will be a
restructuring charge for the yea ending 31 December 1994 in the map of
U-SS150-200 million after =. This rationalisation cost will have no impact on
B.A.T Industries' ability to maintain its progressive dividend policy.
Commenting on the settlemem Martin Broughton, Chief Executive of B.A.T
Industries. said: "I am delighted that we will now be able to complete the
transaction and that Brown & Williamon will be able to press on with their plans
for American Tobacco. Obviously, we would have preferred to retainhfonrclair
but this seems a reasonable price to pay for certainty. We have consistently argued
that the acquisition, as well as making immediate financial sense for BAT
shareholders. will benefit US consumers through the creation Of 2 More effective
third force in the market."
The settlement came after an eight day hearing before Judge Milton Pollack in the
US Federal District Court in New York. while the matter was awaiting decision.
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B.A.T INDUSTRIES P.L.C. - MINNESOTA DEpOSITORy Copy - PRODUCED PURWANT To VII.D. OF
comEwT iuoQiAEwT DATED 5/8M IN SrATE OF MINNESOTA, ET AL. v. PHXAP MORRO, ET AL CASS No. CI-94-M5
-2.
Note: BAT will be acquiring Lacky Strike. pall Mail and Carlton, together with
ULM. Private Stock and other private label brands in the lower priced segment.
BAT is also acquiring the rights to SUk Cut outside Europe and entering into a long.
tam arrangement with American Brands' UK subsidiary, Gallaher, for the
manufacture of Silk Cut.
ends -
For brther information, please contact:
BAT Industries
Nchael Prideaux
London
Ralph Edmondson Tel: 071222 7979
KeImt & Co.
Am IFingeroth
New York
Mark Semer Tel: 212 593 2655
NJ
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B.A.T INDUSTRIES P.L.C. - MINNESOTA DEPOSITORY COPY - PRODUCED PURSUANT To VII.D. OF
CONSENT JUDGMENT DATED 50W IN STATE OF ARNNESOTA, ET AL. v. PHXr AkRft, ET A CASE NO. CI-944MS