“This is a major step towards our ambition to leverage our combined skills in the global cigar and pipe tobacco industry. By creating this value enhancing business platform with worldwide reach, we are better positioned to drive growth, profitability and long term shareholder value,” said Lars Dahlgren, President and CEO of Swedish Match AB.
Swedish Match will hold 49 percent of the shares in the new company, with the remaining 51 percent of the shares to be held by STG’s shareholders. JÃ¸rgen Tandrup, currently Chairman of STG, will become the Chairman of the Board and Conny Karlsson, Chairman of the Board of Swedish Match will assume the role as deputy Chairman for the new company. As previously disclosed, Anders Colding-Friis, CEO of STG will be the CEO of the new company.
STG will compensate Swedish Match with 30 MEUR to account for the shareholding and the relative differences in enterprise values on a cash and debt free basis. The cash consideration has been adjusted for exclusion of Swedish Match’s minority stake in Arnold André from the transaction.
Based on the Swedish Match and STG 2009 full year results, the new company would have had an annual turnover of approximately 690 MEUR, EBITDA of approximately 140 MEUR, and a volume of more than 2.5 billion cigars. The STG tobacco business normalized full year 2009 Sales and EBITDA were approximately 320 MEUR and 70 MEUR respectively, employing about 3,500 employees. For the full year 2009, the normalized Sales and EBITDA for the businesses to be contributed to the new company by Swedish Match were approximately 370 MEUR and 70 MEUR respectively, employing about 7,000 employees.
The main advisors to Swedish Match in this transaction have been Sundling WÃ¤rn Partners and KPMG Transaction Services.
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