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News Release

British American Tobacco acquires control of Indonesia’s Bentoel

17 June 2009

British American Tobacco today acquired from Rajawali Group and other shareholders an 85 per cent stake in Indonesia’s fourth largest cigarette maker PT Bentoel Internasional Investama Tbk for US$494 million (GBP303 million).

The price is equivalent to IDR873 per share, a premium of 20 per cent over Bentoel’s closing price of IDR730 per share on 15 June 2009. A public tender offer for the remaining shares will be announced in due course and is expected to be completed by the end of August 2009.

Assuming that all the shares are tendered, the overall transaction would value 100 per cent of Bentoel at approximately US$580 million (GBP356 million).

John Daly, British American Tobacco’s Asia-Pacific Director, said: “This transaction represents an excellent strategic opportunity to enter the very large and growing Indonesian kretek market and will provide a platform for future growth.”

Indonesia is the world’s fifth largest tobacco market by volume, with sales of around 250 billion cigarettes a year, and a global top ten market by profit.

The kretek segment accounts for some 93 per cent of the market. Kreteks are cigarettes made from tobacco and cloves and are produced by machine or hand rolled. Bentoel’s key kretek brands include Star Mild, X Mild and Sejati.

In 2008 Bentoel sold 17.7 billion cigarettes, representing approximately seven per cent of the market.

Bentoel’s earnings before interest, tax, depreciation and amortisation for the 12 months to 31 March 2009 were US$53 million (GBP32 million). It had net debt of US$164 million (GBP101 million) at 31 March 2009.

British American Tobacco’s existing business, PT BAT Indonesia Tbk, has an approximate two per cent market share and competes only in the white cigarettes market.

Notes to editors

  • Exchange rates: US$1.63 = GBP1.00 = IDR 16,499
  • The transaction represents an EV/EBITDA multiple of 12.9x after adjusting for normal working capital levels.
  • Rajawali Group held a 56 per cent shareholding in Bentoel.
  • British American Tobacco is the world’s second largest quoted tobacco group by global market share with brands sold in more than 180 markets. In 2008 its subsidiary companies sold 715 billion cigarettes made in 49 factories in 41 countries and employed more than 50,000 people.
  • British American Tobacco is being advised by Deutsche Bank and UBS.


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British American Tobacco Asia-Pacific Region
Simon Millson, Regional Head of Corporate and Regulatory Affairs
+852 9189 2213