Imperial Tobacco to acquire Altadis in $22-billion cash deal

Three months after closing its $1.9-billion buyout of Commonwealth Brands, which enabled it to expand into the US market, Europe''s second-biggest cigarette maker, the UK-based Imperial Tobacco Group Plc, today announced its decision to acquire its Franco-Spanish rival Altadis, for €50 in cash per share.

The offer is an improvement from its previous proposal of €45 and €47 a share, rejected by Altadis, and 29-per cent higher than Altadis'' share price on the day prior to Imperial''s offer in March, this year, and values the transaction at €16.2 billion ($22.4 billion / Rs93,036.6 crore), including debt..

The price also matches a rival offer from Europe''s second-largest leveraged buyout firm, London-based CVC Capital Partners.

Altadis said it would back the Imperial offer in the absence of a higher offer from CVC. Imperial plans to finance this takeover, the European tobacco industry''s largest, by issuing new shares worth £5.4 billion.

Through the takeover, Imperial, that owns the Davidoff brand will gain the Gitanes and Gauloises brand of cigarettes that has achieved near-iconic status, and some of the world''s best-selling cigars like Montecristo and Don Diego, and strengthen the British company''s position as the world''s No.4 cigarette maker.

The Spanish company also owns the largest distributors of tobacco in its domestic market, Italy and Morocco, which imperial will get after the takeover.