Press releaseJul 2, 1999
Final agreement regarding sale of Swedish Match's cigarette operations to Austria Tabak
Swedish Match and Austria Tabak
have today reached a final agreement regarding the latter’s
takeover of Swedish Match’s cigarette operations, for a cash
sum of MSEK 4,800. The capital gain is estimated to be MSEK
4,200.
The cigarette operations have
annual sales of MSEK 1,490 with an operating profit of MSEK 473
on a rolling 12-month basis. The transaction includes a
production plant in Malmö, management and marketing functions in
Stockholm, sales force, and a local Estonian operation. A total
of some 500 employees are involved in these operations. The most
important brands are Blend, Right and John Silver. The share of
the Swedish cigarette market amounted to 48 percent in 1998.
"The sale of Swedish
Match’s cigarette operations should be seen against the
background of the company’s strategy of concentrating the
major portion of its resources and future investments toward
smokeless products and cigars," comments Lennart Sundén,
President and CEO of Swedish Match.
The tax implications have been
clarified in a ruling given by Sweden’s Supreme
Administrative Court. The capital gain is expected to be taxed in
accordance with Dutch regulations, whereby the tax is limited to
stamp duty of 1 percent of the purchase price of MSEK 4,800.
The agreement requires approval by
the competition authorities, which is expected to be granted
during August 1999.
Swedish Match is an
international group with its head office in Stockholm. The
company produces an extensive range of tobacco products, matches
and disposable lighters. The products are sold in 140 countries.
The company’s total sales during 1998 amounted to
approximately MSEK 8,200. The Swedish Match share is listed on
the Stockholm Stock Exchange (SWMA) and New York’s Nasdaq
Exchange (SWMAY).
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