Reynolds American has agreed to sell its Lane Ltd. division to Danish company, Scandinavian Tobacco Group A/S, for $205 million. STG became the largest manufacturer of pipe tobacco in the world after their merger with Swedish Match last year.
[October 5, 2010: Merger Creates Largest Pipe Tobacco Co. in the World]
The deal, which requires regulatory approval, is expected to close in the first half of 2011.
Lane, a wholly owned subsidiary of Reynolds American, is based in Tucker, Ga., with 110 employees in two operations. Among its products are Captain Black pipe tobacco and popular bulk pipe tobaccos Lane 1Q and BCA.
Anders Colding Friis, the chief executive of Scandinavian, said that buying Lane strengthens its position in the roll-your-own/fine-cut tobacco sector. Gaining access to Lane’s U.S. sales force will ensure growth in that market, he said.
Scandinavian is expected to continue to run Lane’s operations. R.J. Reynolds Tobacco Co. has been handling Lane’s sales, marketing and distribution through a service agreement. Bryan Hatchell, a spokesman for Reynolds, said that none of its jobs is affected by the deal.
There are several popular pipe tobacco brands produced and marketed by STG in the Orlik factory, which they own, including; Dunhill, Balkan Sasieni, Escudo, Orlik, W.Ø. Larsen, CAO, Borkum Riff, Erinmore and Half & Half as well as many others. Stanwell Pipes are also part of the company.