Globe House, British American Tobacco's London headquarters
By 1970, British American Tobacco has operations in 50 countries.
Diversification with the creation of BAT Industries in the late 1970s and the expansion into financial services in the 1980s gives way by 1989 to a re-focus on the tobacco business.
By 1970, under new Chairman Richard Dobson, British American Tobacco companies are manufacturing in 140 factories across 50 countries. Two years later, with the revocation of its 1902 agreement with Imperial, it gains exclusive ownership of its original brands, including State Express, in the UK and Western Europe.
In the company’s quest for another significant business, British American Tobacco finally settles on retailing where acquisition in the seventies includes Argos in the UK and Saks Fifth Avenue in the United States.
In 1976, the Group undergoes radical reorganisation. With a new Chairman, Peter Macadam, operations are coordinated under a new holding company, B.A.T Industries. Within two years, Industries is the UK’s third largest company and the largest tobacco manufacturer in the free world with annual sales of 500 billion cigarettes.
As the company celebrates its 75th anniversary in 1977, Macadam comments:
“We have survived two world wars, the loss of our China business, [and] dispossession in numerous places elsewhere…and we have come through stronger and, I believe, better poised today than we have ever been.”
Meanwhile, Brown & Williamson opens its new US$150 million factory in Macon, Georgia. By the end of the decade, British American Tobacco exports the first batch of cigarettes to China since the nationalisation of its operations there 30 years before.
By the end of the decade, with its acquisition of Lorillard’s international business, the Group acquires several more key brands, including Kent.
By 1981, trading profits from the tobacco operations have tripled over the previous decade to more than £463 million as production capacity steadily increases.
With the acquisition of Eagle Star in 1984, Allied Dunbar the following year, and the Farmers Group in 1988, BAT Industries is by 1989 the largest UK-based insurance group. The same year, with a 24 per cent pre-tax profit increase to more than £2 billion and confronted by a hostile takeover bid, BAT Industries decides to re-focus exclusively on tobacco and financial services and dispose of almost everything else.
In the 1990s, economic liberalisation and the break-up of state monopolies open up new trading opportunities in Central and Eastern Europe and the Far East. British American Tobacco acquires Hungary’s Pecsi Dohanygyar in 1992. Acquisitions and joint ventures follow rapidly in Ukraine, Uzbekistan, the Czech Republic, Russia, Romania and Poland.
Another significant acquisition is that of the American Tobacco Company in 1994, giving British American Tobacco ownership of the Lucky Strike and Pall Mall brands.
Returning to its roots
In 1998, BAT Industries divests its financial services businesses. That same year the company acquires Cigarrera La Moderna, the leading cigarette company in Mexico.
In 1998, British American Tobacco p.l.c. becomes a separately quoted company on the London Stock Exchange, with Martin Broughton as its chairman. In 1999, British American Tobacco, the second largest tobacco company, announces a global merger with Rothmans International, the fourth largest. With the merger, British American Tobacco adds to its portfolio several major brands, including Dunhill.