UK's Imperial Tobacco makes $15 billion bid for Spanish rival Altadis

14 March 2007

Mumbai: UK's Imperial Tobacco has made a €l1.5-billion ($9.78 billion / Rs43,182.5 crore) cash bid for its Franco-Spanish rival Altadis.

Madrid-based Altadis, maker of the Gauloises and Fortuna brand cigarettes, said the unsolicited offer, at €45 a share, was subject to approval from the company's board.

The board is due to meet in the next few days to discuss the offer.

Imperial, the world's fourth-largest cigarette group, maker of brands such as Lambert & Butler, West and Davidoff, said things are at an early stage and there could be no certainty that the approach would lead to a formal offer.

Altadis has a better business and stronger brands than the Gallaher Group for which Japan Tobacco is paying £7.5 billion in cash, but the offer was at the same 12.5 times 2007 forecast earnings that Japan Tobacco is paying.

The Imperial-Altadis combine could generate annual savings of €270 million. Imperial has also a good track record of making acquisitions work.

Imperial's biggest acquisition since the company got listed in 1996 was Germany's Reemtsma in 2002.