• April 23, 2024

Imperial Brands Sells Cigar Business

 Imperial Brands Sells Cigar Business
photo: Image by Chris Frenzel from Pixabay

Imperial Brands has agreed to the sale of its premium cigar business, Premium Cigars, for €1.23 billion ($1.33 billion).

After adjusting for tax and other costs, the disposals are expected to realize net cash proceeds of around €1.09 billion. The proceeds will be used for debt reduction and will reduce September 2019 pro-forma net debt to EBITDA leverage by 0.2 times.

“We are delighted to be able to announce the sale of Premium Cigars in the current challenging global environment,” said Dominic Brisby and Joerg Biebernick, joint interim chief executives. “It has been a complex transaction involving joint venture partners and assets across multiple geographies, and we would like to thank everyone involved for working so hard to get the deal agreed.”

“We believe we have found the right long-term owners for Premium Cigars; they are committed to investing in the business to maximize future growth opportunities and are well positioned to further develop operations internationally,” Brisby and Biebernick added.

The sale will take place in two transactions documented under two sale agreements: one for the USA business (Premium Cigar USA) and another for the rest of the world business (Premium Cigar RoW).

Gemstone Investment Holding will acquire Premium Cigar USA for a consideration of €185 million. Allied Cigar Corp. will acquire Premium Cigar RoW for a consideration of €1.04 billion.

The transactions are expected to close in the third quarter of 2020. The Premium Cigar RoW transaction includes the sale of the Dominican Republic handmade premium cigar factory, which is expected to close in 2021.