British American Tobacco has agreed to sell Etìnera S.p.A., the distribution business of its Italian subsidiary BAT Italia (formerly state-owned Ente Tabacchi Italiani), for €590 million in cash.
Compañía de Distribución Integral Logista S.A. will acquire a 96 per cent stake and Axiter Investments S.L. the remaining four per cent.
Logista is a specialist distributor of tobacco and other products in Spain and Portugal and is 57 per cent owned by tobacco company Altadis S.A. Axiter is an affiliate of Confcommercio, Italy’s largest trade association.
The transaction is subject to approval from the Italian Government and competition authorities and receipt of satisfactory tax clearance. Completion is anticipated in the fourth quarter of this year.
Paul Adams, British American Tobacco’s Chief Executive, said: “This transaction is a sensible solution for all concerned in the Italian tobacco industry.
“It allows BAT Italia to focus on developing its portfolio of international and local brands and avoid possible restructuring costs at Etìnera. Also, the new owners are committed to improving productivity, sharing the benefit with all tobacco manufacturers. The transaction will enhance Group earnings per share as a result of not having to restructure Etìnera in the event of a withdrawal of business by Philip Morris International.”
At 30 September 2003, Etìnera had net assets of €57 million. At the same date Etìnera had net cash of €373 million from which a €38 million dividend was paid to ETI in December 2003. Earnings before interest, taxes, amortisation and depreciation were €60 million and interest income was €16 million for the year to 30 September 2003.
British American Tobacco won the auction to acquire ETI for €2.325 billion (GBP1.6 billion) in July last year. The transaction was approved by the Italian Competition Authority and was completed on 23 December.