British American Tobacco Acquires Bentoel
British American Tobacco acquires an 85 percent stake in Indonesia's fourth largest cigarette maker PT Bentoel Internasional Investama Tbk for $494 million from Rajawali Group and other shareholders.
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 percent of Bentoel at approximately $580 million.
John Daly, British American Tobacco's Asia-Pacific director, says, "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 10 market by profit. The kretek segment accounts for some 93 percent 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 7 percent of the market.
British American Tobaccos existing business, PT BAT Indonesia Tbk, has an approximate 2 percent market share and competes only in the white cigarettes market.
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 percent of Bentoel at approximately $580 million.
John Daly, British American Tobacco's Asia-Pacific director, says, "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 10 market by profit. The kretek segment accounts for some 93 percent 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 7 percent of the market.
British American Tobaccos existing business, PT BAT Indonesia Tbk, has an approximate 2 percent market share and competes only in the white cigarettes market.