- Swedish Match to acquire
National Tobacco chewing tobacco brands, including
Beech-nut
- Purchase limited to
brands, formulations, and inventory
- Synergies are expected in
both production and sales
- Positive effect on both
earnings per share and cash flow
Swedish Match announced today that
they have entered into a definitive Asset Purchase Agreement with
National Tobacco Company, L.P. Swedish Match will provide $165
million for the purchase of National Tobacco’s chewing
tobacco brands and formulations along with the existing chewing
tobacco inventory. National Tobacco’s primary chewing
tobacco brand is Beech-nut. Other brands include Durango, Trophy,
and Havana Blossom.
The National Tobacco chewing
tobacco business, with annual sales of approximately $50 million,
will be fully integrated into the existing Swedish Match
production and sales/distribution network, improving Swedish
Match operational efficiency. The integration of Beech-nut and
other National Tobacco brands into the Swedish Match sales and
distribution network in the United States is expected to bring
added sales opportunities.
"This purchase of the
National Tobacco chewing tobacco brands adds to our portfolio one
of America’s oldest and well respected chewing tobacco
brands, Beech-nut," said Lennart Sundén, Swedish Match
President and CEO. "In addition, this acquisition will
improve our production efficiency in a category that has recently
experienced excess capacity. We will be able to ensure solid
distribution and focus on these fine brands in one of our major
market segments. Due to improved capacity utilization, and
enhanced US distribution benefits, we expect to see
improvement in both our earnings per share and cash flow."
Swedish Match 2001 earnings per share are expected to improve by
SEK 0.10 – 0.13.
The transaction is subject to
regulatory approvals, and other customary conditions.
Merrill Lynch represented Swedish
Match in connection with the transaction.
Swedish Match is an
international group with headquarters in Stockholm, Sweden. The
company manufactures a broad range of tobacco products, matches
and disposable lighters which are sold in approximately 140
countries. Sales for the twelve month period ending December 31,
1999 amounted to approximately 9,400 MSEK. Swedish Match is
listed on Stockholm Stock Exchange (SWMA) and on NASDAQ (SWMAY).
FORWARD LOOKING STATEMENTS:
Certain matters discussed within this press release may
constitute forward-looking statements as that term is defined in
the Private Securities Litigation Reform Act of 1995. Although
management believes that its financial expectations are based on
reasonable assumptions, it can give no assurance that its
expectations will be achieved. The following factors, among
others, could cause the Company's financial performance to differ
materially from that expressed in such statements: (1) changes in
consumer preferences resulting in a decline in the demand for and
consumption of chewing tobacco, (2) an increase in the price of
raw materials, (3) additional governmental regulation of tobacco
or further tobacco litigation, and (4) enactment of new or
significant increases in existing excise taxes.
For further information, please
contact:
Lennart Sundén, President and
Chief Executive Officer office +46 8 658 01 75
Sven Hindrikes, Executive Vice
President and Chief Financial Officer mobile +46 70 567 41
76office +46 8 658 02 82
Bo Aulin, Senior Vice
President, Secretary and General Counsel mobile +46 70 558 03
64office +46 8 658 03 64
Emmett Harrison, Vice
President, Investor Relations office +46 8 658 01 73 mobile +46
70 938 01 73