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Jump to full article: The Wall Street Journal Interactive Edition, 2004-11-08
Author: Mary Ellen Lloyd, Dow Jones Newswires
Intro: A deal to combine the world's No. 2 and No. 3 tobacco-leaf dealers and processors, Dimon Inc. (DMN) and Standard Commercial Corp. (STW), is the latest move in a consolidating global industry.
Executives with Dimon and Standard said the stock transaction, valued at about $670 million, will enhance the companies' ability to compete for contracts with international cigarette producers and will strengthen their balance sheets. Universal Corp. (UVV) is the largest tobacco dealer and processor.
"This has just been an extraordinarily competitive business with the leaf merchants for a number of years now," said Blake Brown, a professor of agricultural economics at N.C. State University in Raleigh, N.C., who follows the tobacco industry. . . .
Dimon, Danville, Va., would hold a 52% stake in the combined company, with Standard Commercial holders controlling the remaining 48%. The deal is subject to shareholder approval and antitrust review by the U.S. Department of Justice, executives said.
DimonStandard, as the new company will be called, may be required to file notice with various foreign governments, but antitrust approval from European Union officials isn't required, Dimon Chairman and Chief Executive Brian Harker said. Harker will retain those titles for DimonStandard, while Standard's chairman and chief executive, Robert E. "Pete" Harrison, will be president and chief operating officer of the new company.
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