31 Post balance sheet events
(a) On 22 February 2008, the Group announced that it had won the public tender for Tekel, the Turkish state-owned tobacco company, with a bid of US$1,720 million. The transaction, financed with a committed bank facility, is subject to regulatory approvals and is expected to be completed later this year. The privatisation only relates to the cigarette assets of Tekel, which principally comprise brands, six factories and tobacco leaf stocks. The privatisation does not include employees and an announcement on employment by the Group is planned nearer to the completion of the transaction, after dialogue with employees and unions.
(b) On 27 February 2008, the Group agreed to acquire 100 per cent of Skandinavisk Tobakskompagni’s (ST) cigarette and snus business in exchange for its 32.35 per cent holding in ST and payment of DKK11,384 million in cash. This transaction, which is subject to approval by the European Commission, is being financed through a committed bank facility and completion is anticipated later this year.
(c) On 21 February 2008, the Group’s associated company Reynolds American announced that it would receive a payment from Gallaher Limited resulting from the termination of a joint venture agreement. While the payment will be received over a number of years, in the first quarter of 2008 Reynolds American will recognise a pre-tax gain of US$300 million.