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Imperial Tobacco Group Plc, Europe's second-largest publicly traded cigarette maker, plans to cut 2,440 European jobs after buying Altadis SA for 12.6 billion euros ($20 billion) earlier this year.
Six of its 58 factories will shut as its payroll falls by about 6 percent, the Bristol, England-based company said today in a statement. The plants slated for closing are located in Spain, France, Germany, Slovakia and Imperial's hometown.
Western European tobacco companies have eliminated jobs and shut factories in the face of government restrictions on smoking and bans on advertisements that have cut into cigarette sales. The takeover of Altadis, the Madrid-based maker of Gauloises cigarettes and Don Diego cigars, added about 27,000 employees to Imperial's work force.
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Imperial Tobacco Group Plc, the maker of Davidoff and West cigarettes, said costs related to its takeover of Altadis SA will lop 140 million pounds ($281 million) from the current fiscal year's profit.
The expenses concern the value of inventory, elimination of inter-company sales and depreciation adjustments, Imperial said today in a statement. Sales are meeting its forecast so far in the year, according to the Bristol, England-based company. . . .
The western European cigarette market will shrink by 1 percent to 2 percent over coming years, Philip Morris International said yesterday. The contraction has slowed following smoking bans and tax increases that cut into consumption in past years, PMI executives said.
Tobacco use will kill 1 billion people this century, a 10- fold increase over the previous 100 years, unless governments in poor nations raise taxes on consumption and mandate health warnings, the World Health Organization said in February.
Tobacco use will kill 1 billion people this century, a 10- fold increase over the previous 100 years, unless governments in poor nations raise taxes on consumption and mandate health warnings, the World Health Organization said in February.Bloomberg story on Imperial's purchase of Altadis. It's unusual to see a purely business story also point out the health costs of tobacco.
A new tobacco giant incorporating well-known brands Regal cigarettes and Montecristo cigars emerged Tuesday as Britain's Imperial Tobacco won control of Franco-Spanish peer Altadis.
Imperial said in a statement that Altadis shareholders overwhelmingly backed its takeover bid for Altadis worth 12.8 billion euros (18.8 billion dollars).
The takeover will create Europe's second-largest tobacco company, behind Altria Group's Philip Morris, making about 312 billion cigarettes a year.
The combination of the world's fourth and fifth biggest tobacco groups will bring together Imperial Tobacco brands Regal, Embassy and Davidoff, with Altadis' Montecristo and Gauloises.
The tobacco industry, however, has escaped liability in 10 of 11 suits — the bulk of those involving actions filed by flight attendants — since 2001.
Last month, the industry racked up its latest victory in a series of lawsuits involving flight attendants who alleged that they developed cancer due to secondhand smoke on airplanes. The case was filed by a mother who claimed that her flight-attendant daughter developed lung cancer and died due to exposure to secondhand smoke on airplanes. Menchini v. R.J. Reynolds, No. 2000-20916-CA-01 (Miami-Dade Co., Fla., Cir. Ct.).
The Menchini case was the ninth flight-attendant case to go to trial since 2001. Juries have ruled in favor of the tobacco industry in seven of those cases, although a judge ordered a new trial in one of those cases. Another went against the industry, and yet another ended in a mistrial and was eventually dismissed.
"We are seeing increased victories . . . but the tobacco companies are the defendants here and they are certainly much more vigorous in their defense tactics than the defendants in the other types of secondhand smoke lawsuits," said Edward Sweda Jr., a senior attorney with the Tobacco Products Liability Project . . .
There are potentially hundreds more flight-attendant lawsuits awaiting trial, many of them stemming from a 1997 class action settlement that gave about 60,000 flight attendants the right to sue tobacco companies individually, Sweda noted. Broin v. Philip Morris, 641 So.2d 888 (Fla. 3d Ct. App.).
One Weston, Fla., law firm alone, Weinstein & Weinstein, has more than 300 flight-attendant cases still pending. . . .
Benjamine Reid of Tampa, Fla.-based Carlton Fields' Miami office, who was the lead lawyer for R.J. Reynolds and Brown & Williamson in the Menchini case, said the flight-attendant cases are not about whether second-hand smoke causes illness. Rather the question is: Does secondhand smoke cause illness in a particular environment, in this case an airplane?
The answer is no, said Reid, who convinced the jury in the Menchini case that the amount of smoke in the aircraft was not enough to make someone sick, "and there are a number of studies to support this conclusion."
Only the select few can enter the online preserve of Altadis, the European tobacco giant. Inside, visitors find a parallel universe in which cigarette smoke takes the shape of a halo, willowy models strut down the runaway with cigarettes hanging from their pouty lips, and icons like Bob Dylan, Clint Eastwood and Brad Pitt flaunt their smokes as symbols of rebellion.
Le Lab, an internal Web site at Altadis, is designed to be part social networking site, part data resource, part virtual pep rally. The target audience is several hundred Altadis brand managers who could use a little inspiration as cafés and restaurants around the world continue to shove users of its wares out the door.
The newest restrictions take effect Jan. 1, when France extends a nationwide ban on smoking in most public places to include bars, restaurants, nightclubs and the last hazy-blue bastion of French society: the café.
Instead of bemoaning its fate, Altadis - a hybrid of old state French and Spanish tobacco monopolies - has taken a cheeky approach to rally its troops as France has followed European smoking strongholds like Spain, Ireland, Italy and Sweden and parts of the United States that have enacted full or partial smoking bans.
The centerpiece of Le Lab is a series of 12 videos extolling the pleasures of smoking produced by the video artist Vincent Gagliostro, a transplanted New Yorker in Paris. . . .
Nicolas Villain, co-director of the CNCT, said that he assumed Altadis was doing everything it could to motivate its employees because he said his organization sometimes got calls from disgruntled workers in the cigarette industry.
"Going forward, of course they want to keep their employees from being depressed and they want to tell them that smoking is a normal thing," he said.
I want the films to clarify and educate. In some ways it's like reintroducing smoking and what I came up with is responsible smoking. Responsible smoking is about co-existing really. It's about dialogue between smokers and nonsmokers. Video artist Vincent Gagliostro, who created a series of 12 videos extolling the pleasures of smoking. The videos were produced by Altadis, which placed them on Le Lab, its protected website.
Imperial Tobacco Group Plc cleared the last major hurdle to buying rival Altadis as shareholders of the Franco-Spanish cigarette maker scrapped a rule limiting any single shareholder's voting rights to 10 percent.
At an extraordinary meeting, Altadis shareholders on Tuesday changed the rule after Imperial made it a pre-requisite for its 50-euros-a-share cash bid, valuing the maker of Montecristo cigars and Gauloises cigarettes at 12.6 billion euros ($18.1 billion).
The first three months of the smoking ban in England were enough to send cigarette sales plummeting, Imperial Tobacco revealed this morning as it said it expects the Spanish regulator to approve its £11 billion takeover of Altadis.
Imperial said the smoking ban and a poor summer combined to undo a buoyant first half to the year, with volumes falling by around 2 per cent for the year to September 30. The smoking ban was introduced in England on July 1.
The company said: "As anticipated, and in line with our experiences in other markets with similar legislation, these have resulted in an initial decline in cigarette market volumes. Once the initial impact of public smoking bans has dissipated, we expect annual cigarette market declines of 3 per cent to 4 per cent in line with the long-term trend."
The company reported a 6 per cent improvement in full-year group pre-tax profits of £1.2 billion this morning, boosted by growth in Asia.
Gareth Davies, chief executive of Imperial Tobacco, will travel to Cuba to woo Fidel Castro’s Government after a board recommendation of the group’s €12.6 billion (£8.5 billion) offer to acquire Altadis, the Franco-Spanish tobacco company, announced yesterday.
Mr Davies hopes to secure Cuban government support for the deal and persuade it not to exercise a change of control clause that it holds over Corporaci�n Habanos, a 50-50 joint venture which Altadis operates in Cuba that owns the country’s most famous cigar brands, including Montecristo, Cohiba, Romeo y Julieta and Partagas.
Mr Davies said yesterday the proposed entry of Habanos into 50 per cent British ownership would represent a “great addition†to Imperial’s existing portfolio of cigarette brands, including Lambert & Butler, Superkings and Embassy.
Imperial Tobacco chief executive Gareth Davis is already planning a charm offensive in Cuba to show that Altadis's 50pc stake in Habanos, the state-owned manufacturer of some of the world's most famous cigars, is in safe hands.
He brushed aside fears that a change of ownership clause in the joint venture would be invoked, predicting a bright future for Imps in the spiritual home of smoking.
"Hopefully the change of control clause will not be exercised. It's an attractive business and it will benefit from Imperial's wide sales and distribution network. We're very hopeful Habanos will go from strength to strength under our stewardship," Mr Davis said.
Although the maker of Montecristo and Romeo y Julieta cigars was not Imperial's main target, the part-ownership of a clutch of famous brands, such as Cohiba, that the Altadis takeover brings is a prestigious bonus for the life-long smoker and a potential money-spinner if the huge American market was to open up after the death of Fidel Castro. The ultimate luxury product, cigars attract much wider margins than cigarettes.
"These are iconic cigar brands," Mr Davis said yesterday. "Emerging, aspirational markets are growing at a cracking pace and these sorts of products are highly sought after. We can do really well with them."
Gareth Davis is a committed smoker even to the point that a cigarette and a glass of red wine caused him to miss the rare spectacle of a streaker baring all at a World Snooker Championship final.
The Imperial Tobacco Group Plc ( chief executive missed that famous TV shot at an event sponsored by his favoured Embassy cigarette brand. But he has rarely been snookered in a lifetime career in the tobacco industry in which he has transformed Imperial into a global player.
On Wednesday, Davis, 57, announced Imperial had agreed to take over Franco-Spanish rival Altadis for 50 euros a share, or 12.6 billion pounds before debt and minority interests, to cement Imperial's position as the world's No 4. . . .
he has not missed a trick over 11 years leading Imperial in several acquisitions.
In his 35-year career at Imperial, he has seen the maker of Embassy, Lambert & Butler and Superking cigarettes transformed from a domestic producer making most of its profit in the north of England to be a key player in a global tobacco industry.
Imperial Tobacco Group Plc agreed to buy Altadis SA for 12.6 billion euros ($17 billion), gaining Gauloises cigarettes and the world's best-selling cigars after a four-month takeover battle with CVC Capital Partners.
Investors in Madrid-based Altadis will receive 50 euros in cash for each share, or 29 percent more than the price March 14, the day before Imperial's first bid. The U.K. company said it will raise as much as 5.4 billion pounds ($11 billion) by selling new stock to fund Europe's biggest tobacco acquisition.
The takeover gives Bristol, England-based Imperial a foothold in Russia and Morocco and brings tobacco mergers in the past eight months to about $40 billion.
CVC Capital Partners Ltd. and PAI Partners offered 12.8 billion euros ($17.4 billion) for Altadis SA, the Spanish maker of Gauloises cigarettes, topping a bid from Imperial Tobacco Group Plc.
The buyout firms offered 50 euros a share in cash, Madrid- based Altadis said today in a regulatory filing. The Spanish company last month rejected an increased bid of 47 euros from Bristol, England-based Imperial Tobacco. Altadis said its board will meet in ``the next few days'' to discuss the new proposal.
Altadis shares rose above the value of the latest offer, indicating investors expect an increased bid. The maker of Gitanes and Fortuna cigarettes has the second-biggest market share in Spain and France after Altria Group Inc. Japan Tobacco Inc.'s 7.5 billion-pound ($15 billion) acquisition of Gallaher Group Plc in December has sparked more bids in the industry.
Imperial Tobacco, the world's fourth-largest cigarette maker, on Tuesday reported a 6% rise in net profit as it also continues to seek a friendly deal with takeover target Altadis.
Profit for the six months ending March 31 rose to 421 million pounds ($840 million) from 397 million pounds a year earlier. Adjusted pretax profit rose 5% to 557 million pounds, which UBS analysts noted was comfortably ahead of their 542 million-pound forecast.
Revenue for the period grew 4.8% to 5.85 billion pounds on a 5% rise in cigarette sales volume.
Altadis mounted its defences against a 12 billion euro ($16.3 billion) offer from Imperial Tobacco on Monday, raising its forecasts and saying it could sell about 650 million euros of non-core assets.
The Franco-Spanish company, which rejected Imperial's 47 euro a share bid earlier this month, said the offer did not fairly reflect Altadis's value.
Altadis shares were flat at 48.70 euros at 0800 GMT against a 0.5 percent fall on Spain's blue-chip index.
Imperial Tobacco is drawing up plans for the City’s second-biggest rights issue in six years, raising up to £4 billion to finance its planned takeover of Altadis, the Franco-Spanish cigarette maker.
Altadis, which owns Gauloises and Gitanes, yesterday surprised the market by announcing it had received a €45 per share offer from Imperial which it said was “non-solicited nor negotiated”.