BRITISH American Tobacco is looking to take over a Colombian cigarette-maker for around £290m, sources close to the firm said last night
A person close to BAT, which owns the Dunhill, Rothmans and Benson & Hedges brands, told City A.M. the firm has long been keen to buy Protobaco and plans to renew its efforts now rival Philip Morris has abandoned its advances.
BAT’s spokesperson declined to comment.
US cigarette-maker Philip Morris dropped its $452m (£290m) plans to take over Protobaco last week, blaming what it said were burdensome conditions imposed by Colombia’s industry watchdog.
The firm would have been forced to sell some of its brands in Colombia and keep the market open for other retailers before the purchase of Protobaco was waved through by regulators.
It had originally agreed to buy 32 per cent of Protobaco from its private owners in mid-2009.
BAT, which already operates in the country, has a much smaller market share than Philip Morris, the biggest tobacco firm in Colombia with control of close to 50 per cent of the market share.
Colombia introduced anti-smoking legislation in 2009 to limit advertising on tobacco products.
A takeover would be a chance for outgoing chief executive Paul Adams to put his final stamp on British American Tobacco before he retires in February, capping off more than $5bn (£3.3bn) of acquisitions since he took the helm in 2004.
FAST FACTS | BA TOBACCO
● British American Tobacco was formed in 1902 as a transatlantic joint venture
● The FTSE 100 firm posted a pre-tax profit of £2.2bn for the six months to the end of June 2010, up eight per cent on last year