Press releaseOct 6, 1999
Swedish Match acquires snuff and pipe tobacco company in South Africa
- Important strategic step
for growth within OTP (Other Tobacco Products: smokeless,
cigars and pipe tobacco)
- Platform for expansion in
South Africa and neighbouring countries
- Extensive distribution
network provides opportunities for increased sales of
Swedish Match´s products in southern Africa
Swedish Match has signed an
agreement to acquire 80 percent of Leonard Dingler (Proprietary)
Limited (Dingler) in South Africa. Dingler was established in the
early 1900`s and has remained a family owned business to this
date. The company manufactures, sells and distributes tobacco
products in South Africa and neighbouring countries. Annual sales
amount to 360 MSEK. Approximately 25% of the volume is in snuff
and the remainder is in pipe tobacco.
The transaction is structured as
an asset deal. The acquisition is expected to be immediately
enhancing to earnings per share and cash flow, and the operating
margin after acquisition related depreciation and amortization is
estimated to be 30%. The company will be included in Swedish
Match Group financials as from the fourth quarter 1999.
Dingler’s principal brand,
"Boxer," is the market leader in South Africa’s
pipe tobacco market, as is its "Taxi" brand in the
snuff market. Both markets have a stable growth pattern. The
acquisition includes a production plant in Boksburg, on the
outskirts of Johannesburg, and sales offices in Cape Town and
Bloemfontein. Dingler has slightly more than 300 employees.
"The acquisition of Dingler
reinforces our strategy to grow within our core focus areas:
snuff, cigars and pipe tobacco, while providing a
high-profitability opportunity in an area of the world which has
good growth potential," said Lennart Sundén, CEO.
"With this acquisition we now have established a platform in
southern Africa, one of the most important markets for smokeless
tobacco outside the Nordic countries and North America."
Mark Wraith, who will continue as
Managing Director of the company, said, "Swedish Match
represents deep industrial knowledge as well as international
experience and competence, which will strengthen Dingler´s
competitiveness in the future."
The acquisition is expected to be
finalized during October. Swedish Match was advised by Credit
Suisse First Boston.
Swedish Match is an
international group with its head office in Stockholm. The
company produces an extensive range of OTP (Other Tobacco
Products: smokeless, cigars and pipe tobacco), matches and
lighters, which are sold in 140 countries. The company’s
total sales amount to approximately BSEK 9.0. The Swedish Match
share is listed on the Stockholm Stock Exchange (SWMA) and NASDAQ
(SWMAY).
For further information, please
contact:
| Lennart
Sundén, President and Chief Executive Officer |
office |
+46-8-658
01 75 |
| |
|
|
| Sven
Hindrikes, Senior Vice President and |
office |
+46-8-658
02 82 |
| Chief
Financial Officer |
mobile |
+46-70-567
41 76 |
| |
|
|
| Lin
McKinnie, Vice President, |
office |
+46-8-658
02 99 |
| Srategic
and Financial Planning |
|
|
| |
|
|
| Bo Aulin,
Senior Vice President, Corporate Affairs |
office |
+46-8-658
03 64 |
| |
mobile |
+46-70-558
03 64 |
The following files are available for download
(DOC, 58 kB)
(PDF, 91 kB)