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Imperial Tobacco looks to combine with Altadis

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Imperial Tobacco looks to combine with Altadis

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Britain’s Imperial Tobacco is offering 11.5 billion euros for the Franco-Spanish tobacco group Altadis. It is an unsolicited bid and Altadis said its board will meet in the next few days to decide whether to back it. There would then have to be regulatory approval and acceptance by 80% of Altadis’ shareholders.

Imperial is the biggest European cigarette company in terms of turnover last year at 17 billion euros. British American Tobacco has also been mentioned by analysts as a possible bidder for Altadis, Europe’s fourth largest tobacco firm with 6.3 billion euros turnover in 2006.

Even though tobacco companies are consolidating amid wider anti-smoking restrictions, this may not be a quick and easy marriage. Altadis has repeatedly said in the past that it sees itself as a buyer of assets, not a takeover target. Industry analysts said the price would probably need to be higher, but pointed out that Imperial has a good record of making acquisitions work and it could realise at least 270 million euros of annual savings by combining with Altadis.