UK Imperial deal backed by shareholders

UK Embassy cigarette firm Imperial Tobacco today won the backing of its shareholders for a £11bn (€16bn) takeover of Gauloises firm Altadis.

Bristol-based Imperial has been engaged in a long-running pursuit of Altadis, after first making an approach for the Spanish firm in March.

The vote by Imperial shareholders in Bristol also gave directors the ability to carry out a fund-raising rights issue worth up to £5.4bn (€8bn).

Shareholders overwhelmingly backed the resolution, with 99.82% of those voting being in favour. Imperial hopes to complete the deal in the October to December quarter, following approval from regulators in Spain.

The acquisition will consolidate Imperial’s position as the world’s fourth largest tobacco group, strengthening its position in Germany, France and Italy, while enabling it to close the gap on its three biggest rivals – Philip Morris, British American Tobacco and Japan Tobacco.

It will also boost its position in growing markets such as Morocco, Russia, Finland and Poland.

Additionally, a combination of the two firms would enable Imperial to get its hands on Altadis’s Cuban cigar business, which includes brands such as Montecristo and Romeo y Julieta and has a strong presence in North America.

The cigars business combined with the Commonwealth Brands business, acquired by Imperial in February, would give the group “considerable scale” in the profitable US market.

Imperial chief executive Gareth Davis said: “Imperial Tobacco and Altadis are a great strategic fit.”