Merger Creates Largest Pipe Tobacco Co. in the World
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Kevin Godbee - Oct 5, 2010
- 2 min read
Scandinavian Tobacco Group is Now the World’s Largest Pipe Tobacco Company.
Swedish Match and Skandinavisk Holding / Scandinavian Tobacco have completed their merger to become the world’s largest pipe tobacco company. Some of the pipe tobacco brands falling under the new Scandinavian Tobacco Group umbrella include; 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.
After having received the necessary approvals from the relevant competition authorities, Scandinavian Tobacco Group A/S closed the transaction on October 1, 2010 with Swedish Match AB which creates the world’s second largest cigar company and an even stronger world leader in pipe tobacco.
On 26 April 2010 it was announced that the parties had signed an agreement to form a new company by combining all the tobacco business of Scandinavian Tobacco Group A/S (STG) with the cigars and pipe tobacco business of Swedish Match AB (SM) (with the ex-ception of its US mass market cigars). After having obtained the required approvals from a number of national competition authorities, the transaction has now been completed with effect from October 1, 2010.
The new company carries the name Scandinavian Tobacco Group and has an annual turn-over of approximately $956 million and an EBITDA of approximately $194 million (based on 2009 results). Annually more than 2.5 billion cigars and 1,650 tons of pipe tobacco will leave the Group’s factories in Europe, Asia and Central America. The joint company has approximately 9,700 employees.
The new company, which has sales companies in 15 countries, is market leader in a number of countries in Europe within cigars and pipe tobacco and holds more than 30% of the US premium cigar market. The company’s leading cigar brands include Café Crème, La Paz, Henri Wintermans, Colts, Mercator, Macanudo, CAO, Partagas (US), Cohiba (US) and Punch (US). Leading pipe tobacco brands are Erinmore, Borkum Riff, Clan, Half&Half, and W.ø. Larsen.
Skandinavisk Holding A/S (SH) holds 51% of the shares in the new Scandinavian Tobacco Group, with the remaining 49% of the shares being held by Swedish Match AB (SM). Jørgen Tandrup, Chairman of SH and the former Scandinavian Tobacco Group (STG), is Chairman of the Supervisory Board and Conny Karlsson, Chairman of SM, holds the role as Deputy Chairman of the Supervisory Board.
Anders Colding Friis, CEO of the former STG, is CEO of the new Scandinavian Tobacco Group which is headquartered in Copenhagen, Denmark.
"After months of preparations we are very pleased now to be able to start the integration of the two businesses. The new Scandinavian Tobacco Group is a truly global company and we have an excellent basis in the combined brand portfolio to grow even further and increase profitability," says Anders Colding Friis.
In Australia and New Zealand the competition authorities have given their approval to the transaction on the condition that the new company divests part of its business in those countries. The divestment will take place post closing and will not materially affect the operation or financial performance of the new joint business.
Written by Kevin Godbee
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It stand’s to figure to what many have predicted year’s ago. Only a handfull of the corporate elite will be running the show. Thezman.
I read this article when it first appeared online a few days ago, and I still can’t decide on whether it’s good news or bad. The merger certainly reflects the strength of the industry; but I wonder if someone’s favorite blend will be heartlessly discontinued because it can’t meet marketing targets.
I think you may be mistaken about STG-SM’s ownership of Dunhill pipe tobacco brand. BAT did sell a number of pipe tobacco brands to STG (Orlik) in early 2007 but BAT retained the Dunhill & Cptn Black pipe tobacco brands. STG may make them under contract to BAT but BAT is still the TM owner. I think STG does have a distribution business in Denmark so they distribute at least two of the Dunhill blends there.
STG has a nice list of all their pipe tobacco brands:
http://www.st-group.com/product+range/pipe+tobacco/complete+brand+list
Thanks for that link. That’s a nice list of tobaccos by STG. As far as it being complete depends upon one’s point of view.
Yes, BAT owns the Dunhill trademark.
They also have ownership in STG.
STG owns Orlik.
Orlik makes Dunhill and all of the brands listed on the STG page you referenced, plus several more not listed there.