Press releaseJan 20, 2000
Swedish Match to Make Major Investment in General Cigar Holdings Inc.
- Swedish Match to acquire
64% of General Cigar common stock
- The Cullman family will
continue its management responsibility of the company and
retain ownership of the remaining 36%
- Partnership with General
Cigar strengthens Swedish Match position as a leading
global cigar company
General Cigar Holdings, Inc.
(NYSE: MPP) and Swedish Match AB (Stockholm Stock Exchange: SWMA,
NASDAQ: SWMAY) announced today that they have signed definitive
agreements for Swedish Match to acquire a 64% interest in General
Cigar. The remaining 36% will be held by the Cullman family,
which currently controls the company. Management of the company
will not change as a consequence of the transaction.
General Cigar produces the number
one selling premium cigar in the United States, Macanudo, and
several other strong premium brands sold in the US, including
Partagas, Punch, Hoyo de Monterrey, and Cohiba. The company,
which traces it roots to 1906, has been managed by the Cullman
family since 1961 and is recognized as a world leader in the
premium cigar business. General Cigar reported sales of $108
million for the nine-month period ended August 28, 1999.
Swedish Match will invest
approximately $170 million to buy certain family-owned shares and
to provide part of the financing to allow all of the outstanding
non-family shares to be acquired in the transaction. General
Cigar will provide the remainder of the financing required for
the transaction. Following the transaction, General Cigar’s
shares will no longer be publicly traded.
The transaction is subject to the
vote of General Cigar’s stockholders at a meeting
anticipated to be held in the spring, including a vote of a
majority of the publicly-held shares. The Cullman family has
agreed to vote all of its shares of General Cigar stock in favor
of the transaction, which has been recommended by the unanimous
vote of an independent committee of the company’s Board of
Directors.
Edgar Cullman, Sr., the Chairman
of the Board, and Edgar Cullman, Jr., the President and CEO of
General Cigar, will both continue in their existing roles.
General Cigar corporate headquarters are in New York City, New
York, with production facilities in Santiago, Dominican Republic;
Kingston, Jamaica; San Pedro Sula and Danli, Honduras; and Tampa,
Florida. General Cigar is one of the leading suppliers of
high-quality Connecticut shade wrapper to the world.
"We have formed a strong
business relationship with Swedish Match following the sale of
our mass market business to them last spring. With the cigar
market becoming more global, Swedish Match’s interest in our
premium cigar business has now resulted in this transaction and
allowed us an opportunity to improve significantly shareholder
value. Indeed, our family will be selling approximately one-third
of our holdings along with all the shareholders," said Edgar
M. Cullman, Jr., General Cigar’s Chief Executive Officer.
Lennart Sundén, Swedish
Match’s President and CEO said, "In General
Cigar and the Cullman family we are associating ourselves with
one of the most respected and experienced cigar management teams
in the world. This provides an opportunity to jointly develop and
expand our global position for some of the world’s greatest
cigar brands. Our worldwide strength in cigar distribution, and
General Cigar’s outstanding market position in the US
provide both parties with exciting growth opportunities. We also
believe that this transaction is an important step in the
consolidation of the world cigar business."
The transaction is subject to a
number of conditions including receipt of requisite shareholder
consent, regulatory approvals, and other customary conditions.
Merrill Lynch represented Swedish
Match in connection with the transaction.
General Cigar, which traces its
roots to 1906, is a leading manufacturer and marketer of premium
cigar brands including Macanudo, Partagas, Punch, and Hoyo de
Monterrey. In addition to being a major grower of high-quality
Connecticut shade wrapper tobacco, General Cigar owns and
operates the Club Macanudo cigar bars in New York City and
Chicago.
Swedish Match is an
international group with its head office in Stockholm. The
company produces an extensive range of OTP (Other Tobacco
Products: smokeless tobacco, cigars and pipe tobacco), matches
and lighters, which are sold in 140 countries. The company's
sales for the 12-month period ended September 30, 1999 were
approximately MSEK 9.000. 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 |
| |
|
|
| Massimo
Rossi, Executive Vice President and Deputy |
office |
+46 8 658
11 78 |
| Chief
Executive Officer |
|
|
| |
|
|
| Sven
Hindrikes, Executive Vice President and |
office |
+46 8 658
02 82 |
| Chief
Financial Officer |
mobile |
+46 70
567 41 76 |
| |
|
|
| Bo Aulin,
Senior Vice President, Corporate Affairs, |
office |
+46 8 658
03 64 |
| Secretary
and General Counsel |
mobile |
+46 70
558 03 64 |
| |
|
|
| Emmett
Harrison, Vice President, Investor Relations |
office |
+46 8 658
01 73 |
| |
mobile |
+46 70
938 01 73 |
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