Category: Mergers and Acquisitions

Wild Bill’s Tobacco Buys 34 Cheap Tobacco Shops

Credit: Wild Bill’s Tobacco
Wild Bill’s Tobacco has acquired all 34 locations of Cheap Tobacco, including 33 in Central and Eastern Ohio and one in West Virginia, according to a press release from Wild Bill’s Tobacco. The deal was finalized in early November, allowing Cheap Tobacco’s Founder and CEO, Dennis Harper, to retire after “celebrating his 30th year with the company.”
Harper stated, “We’re confident that Wild Bill’s Tobacco will continue to provide amazing products and service you’ve come to expect while adding even more options to enjoy. We wouldn’t have passed the torch to anyone else but the Wild Bill’s family. Their reputation as a leader in our industry can’t be understated. We are proud to have served you over the years and know you will enjoy the added benefits of this transition.”
Prior to this deal, Wild Bills’s Tobacco had over 200 stores in Michigan, Indiana and Ohio and celebrated its 30th anniversary this year, according to the release. Wild Bill’s said it is “thrilled” to add its first store in West Virginia with this acquisition. Wild Bill’s said it is the second largest tobacco retailer in the United States and continues to grow its brand rapidly as the premier tobacco retailer in the world.
“This acquisition allows us to serve a broader customer base and be a part of new communities across the Midwest,” said Jon Welzel, chief marketing officer at Wild Bill’s Tobacco. “Guests will still experience the competitive pricing that became synonymous with Cheap Tobacco, but the store design that is brought to life and streamlined for customer needs, selection, and speed at checkout, as well as the expanded product offerings and premium customer experiences, will create a unique experience for these new members of our family.”
The retailer plans to renovate and provide a facelift to all 34 Cheap Tobacco stores within six to nine months. Walk-in humidors will be added to each location, featuring cigars from around the world.
Through this acquisition, Wild Bill’s Tobacco “has retained all Cheap Tobacco store-level employees, from district managers down, and plans to offer additional benefits for Cheap Tobacco staff members.”
November 27, 2024
KT&G Rejects Offer for Ginseng Business

Image: Photobeps
KT&G rejected an offer by Flashlight Capital Services (FCP) to purchase its ginseng business, reports Business Korea.
On Nov. 8, KT&G sent a response to FCP’s letter of intent. “We will do our best to foster the three core businesses, including health functional foods,” it stated.
“Last year, we announced a mid-to-long-term growth strategy to foster health functional foods along with overseas cigarettes and NGP [next-generation products] as our three core businesses, and we will do our best to achieve these goals,” a KT&G official emphasized.
On Oct. 14, KT&G also issued a statement dismissing FCP’s acquisition proposal, stating, “FCP’s acquisition proposal was unilaterally disclosed without any discussion with us.”
In its letter of intent, FCP offered to acquire all KGC’s shares for nearly KRW2 trillion ($1.47 billion), which represents a 50 percent premium over the enterprise value mentioned by some analysts during KT&G’s 2023 investor day.
Industry insiders believe the likelihood of the transaction being completed is low, given KT&G’s shareholding structure.
November 11, 2024
KT&G Remains Committed to Ginseng Business

Photo: KT&G
The Ginseng business remains a key part of KT&G’s plan for growth, the South Korean cigarette manufacturer said after receiving a bid for its Korea Ginseng Corp. (KGC) unit.
On Oct. 13, Singapore-based activist fund Flashlight Capital Partners offered nearly KRW2 trillion ($1.47 billion) for KGC, which is 50 percent higher than the enterprise value analyst estimates mentioned at KT&G’s 2023 investor day.
Flashlight Capital Partners believes that KT&G significantly undervalues its ginseng business and that the ginseng-tobacco pairing does not work.
According to The Korea Herald, KT&G called Flashlight’s bid a “unilateral” offer. “The acquisition offer was unilaterally released without any discussion with the company,” KT&G wrote in a statement on Oct. 14. “We will look into the letter of intent sufficiently.”
In the announcement, however, KT&G also stressed that KGC is a key part of its plan to nurture future growth drivers. It said it will put in all efforts to achieve the goals set under a mid-term business plan released last year.
The plan, announced in January 2023, involves bolstering its investment and sales in three key areas: next-generation nicotine products, overseas businesses and KGC health supplement products.
The activist fund has been pressuring KT&G to spin off its ginseng unit since 2022, citing low performance and undervaluation. KT&G’s board has argued that a spinoff may lead to a loss of synergy for both KT&G and KGC.
October 16, 2024
Flashlight Offers to Buy KT&G’s Ginseng Business

Photo: Fan Chen
Flashlight Capital Partners (FCP) wants to purchase KT&G Corp.’s Ginseng business. The activist investor, which is also a shareholder in KT&G, has submitted a letter of intent to acquire all shares of KT&G subsidiary Korea Ginseng Corp. (KGC).
FCP is offering KRW1.9 trillion ($1.4 billion), which is 50 percent higher than the enterprise value analyst estimates mentioned at KT&G’s 2023 investor day.
FCP believes that figure significantly undervalues the business. “It’s like watching parents who downplay their own child,” said FCP Managing Partner Sanghyun Lee in a statement. “We see immense potential in the poor kid. We aim to develop Korea ginseng into a global brand, comparable to Manuka honey or Maotai.”
Despite the growing demand for health food, KGC’s operating profit halved from KRW202.1 billion in 2019 to KRW103.1 billion in 2023, and KT&G’s guidance indicates further decline in 2024.
FCP has argued that the tobacco-ginseng pairing was a “wrong marriage,” and that KGC’s value is not reflected in KT&G’s stock price at all. Since 2022, FCP has advocated for a horizontal spinoff of KGC, but KT&G’s board rejected the proposal in 2023.
Lee compared KT&G’s stance on KGC as “Not good enough for me, but too good for others.” He emphasized the need for either a spinoff or sale of KGC and warned that “If KT&G’s board opposes our proposal without a proper rationale, it will only prove that they are serving the interests of management rather than those of the shareholders.”
Headquartered in Singapore, FCP has repeatedly pushed for changes at KT&G. In recent years, it has pushed for a greater emphasis on smoking alternatives, more transparent procedures in filling the company’s leadership, and a new CEO pay structure.
October 14, 2024
JT Completes Vector Acquisition

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The JT Group completed the acquisition of Vector Group (VGR) on Oct. 7, following a tender offer, initially announced on Aug. 21.
The tender offer period, initiated on Sept. 4, 2024, expired at one minute after 23:59 Eastern Daylight Time, on Oct. 4, 2024. The conditions of the tender offer having been satisfied, the JT Group has accepted all such tendered shares, and, following a statutory merger on Oct. 7, 2024, VGR became a wholly owned subsidiary of the JT Group and was delisted from the New York Stock Exchange on Oct. 7, 2024.
In a statement, the JT Group said it expects the acquisition to improve the company’s return-on-investment in combustibles by significantly increasing the group’s presence and distribution network in the U.S, the second largest tobacco market in net sales and one of the most profitable.
October 8, 2024
Kaival to Merge With Delta Corp.

Kaival Brands Innovations Group and Delta Corp. Holdings have entered into a merger and share exchange agreement whereby Kavial Brands and Delta will each become subsidiaries of a specially created holding company, Pubco.
Incorporated under the laws of the Cayman Islands, Delta Corp. Holdings is a privately held company for global businesses engaged in bulk and energy logistics, fuel supply, commodities and asset management.
Following closing of the transactions, which the parties expect will occur in the fourth quarter of 2024, the combined company would be traded on Nasdaq. The combined company will continue to operate under the Delta management team led by Mudit Paliwal, Peter Shaerf and Joseph Nelson.
“This transaction marks an exciting new chapter for Kaival Brands,” said Kaival Brands interim-CEO Mark Thoenes in a statement.
“Delta’s flexible, asset-light business model positions the combined company to capitalize on high growth areas within the energy and raw materials markets and offers our shareholders a unique opportunity. We are confident that this partnership will deliver substantial value to Kaival Brands’ shareholders and employees.”
September 24, 2024
PMI to Record £220 Million Loss on Vectura Sale

Image: Aliaksandr Marko
Philip Morris International expects to record a record loss of about £220 million ($198 million) on the sale of its inhaled-therapeutics Vectura Group unit to Molex Asia Holdings in the third quarter, reports The Wall Street Journal, citing a securities filing.
On Sept. 17, PMI’s pharmaceutical subsidiary, Vectura Fertin Pharma, announced it would sell its Vectura Group business to Molex. The company acquired Vectura Group in 2021 for $1.24 billion as part of PMI’s drive to diversify beyond nicotine.
The company now says that “unwarranted opposition” to its transformation has affected Vectura Group’s engagement with the scientific community and its commercial relationships.
The remaining units of Vectura Fertin Pharma will continue to operate under a new corporate identity and develop oral consumer health and wellness offerings as well as inhaled prescription products for pain management and cardiovascular emergencies.
September 23, 2024
JT Extends Vector Tender

Photo: Paul Brady
Japan Tobacco has withdrawn and refiled its premerger notification and report form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act) in connection with the JT Group’s pending acquisition of Vector Group.
On Sept. 4, 2024, the JT Group commenced a cash tender offer to purchase all outstanding shares of common stock of Vector Group for $15 per share.
JT withdrew and refiled its premerger notification and report form to provide the Federal Trade Commission with additional time for review. Following such refiling, the waiting period under the HSR Act will expire Oct. 3, 2024, at 11:59 p.m. Eastern Time.
The acquisition is expected to be completed by the end of JT Group’s current fiscal year, ending Dec. 31, 2024, subject to receipt of antitrust approvals and satisfaction of customary closing conditions.
September 19, 2024
Japan Tobacco Acquires Vector Group

The JT Group will acquire Vector Group (VGR), the fourth largest tobacco company in the United States.
Based on the purchase agreement, the JT Group will conduct a tender offer for all outstanding shares of VGR through Vapor Merger Sub, an entity established specifically for this acquisition.
The JT Group intends to acquire 100 percent of VGR’s outstanding fully diluted share capital for a per share price of $15, representing a total equity value transaction estimated at around $2.4 billion. The transaction, which is unanimously supported by the board of directors of VGR, is expected to be completed by Dec. 31, 2024, subject to receipt of antitrust approvals and satisfaction of customary closing conditions. Following closing, VGR will be a wholly owned consolidated subsidiary of JT and be delisted from the New York Stock Exchange.
“Vector Group and JT Group share a commitment to quality and excellence and providing consumers an outstanding value proposition in the U.S. cigarette market,” said Howard M. Lorber, president and CEO of Vector Group, in a statement.
“This transaction delivers significant value to Vector Group stockholders and creates opportunities for our employees, who will become part of a leading global organization. Vector Group has an incredibly talented team who have been completely dedicated to building a strong business. JT Group has deep respect for Liggett Vector Brands’ legacy of value-focused, quality products and looks forward to continuing to meet customers’ evolving needs.”
“We are excited by this acquisition which, in line with our tobacco business strategy, will contribute to the acceleration of the ROI [return on investment] in our combustible business and expand JT Group’s global footprint,” said Masamichi Terabatake, JT Group CEO and president of the company’s tobacco business, in a statement.
“By adding this sizeable and historically profitable business to our company, we are confident the transaction will contribute to sustainable growth and increase JT Group’s corporate value.”
“This transaction will significantly increase our U.S. presence, boosting our market share from 2.3 percent to approximately 8 percent and giving us full ownership of two of the top-10 U.S. cigarette brands,” said Eddy Pirard, president and CEO of JT International.
“The transaction will enable us to also strengthen our distribution network and create mid- to long-term strategic opportunities to boost our competitiveness in this major tobacco market.”
August 21, 2024
Scandinavian Tobacco to Acquire Mac Baren

Photo: andrey
Scandinavian Tobacco Group (STG) has agreed on the terms and conditions for the acquisition of all the shares of Mac Baren Tobacco Co. from Halberg. On a debt and cash-free basis, the transaction is valued at DKK535 million ($76.87 million). The acquisition will be financed by cash at hand and debt.
A family-owned business founded in 1826, Mac Baren is a global smoking tobacco company. Its portfolio includes pipe tobacco brands such as Mac Baren, Amphora and Holger Danske as well as fine-cut tobacco brands such as Amsterdamer, Choice and Opal. The company also produces and sells nicotine pouches with the brands ACE and GRITT.
Mac Baren’s products are sold in 74 countries with the majority of net sales generated in the U.S., Denmark and Germany. Other key markets include the U.K., France, Spain and Italy. The company is based in Svendborg, Denmark, with production facilities in Denmark and in Richmond, Virginia, USA. The company has approximately 200 full-time employees.
Mac Baren’s reported annual net sales (April 2024) were DKK723 million with a reported EBITDA of DKK85 million. Nicotine pouches accounted for close to 20 percent of net sales with a small negative contribution to EBITDA.

The acquisition will contribute to our already well-established position on the global market for pipe tobacco and will expand our attractive range of brands of the highest standards to our consumers.
Niels Frederiksen, CEO, STG
“I am very pleased that we have taken this important step to strengthen our smoking tobacco business with the acquisition of Mac Baren,” said STG CEO Niels Frederiksen in a statement. “The acquisition will contribute to our already well-established position on the global market for pipe tobacco and will expand our attractive range of brands of the highest standards to our consumers. The combination with our existing business is expected to deliver meaningful synergies when fully integrated and good value for our shareholders.”
“Scandinavian Tobacco Group is acquiring a strong company with a lot of know-how, loved brands and skilled employees,” said Halberg chairman Torben Sorensen. “Since its inception in 1826, a central part of Mac Baren’s DNA has been its focus on new opportunities and ensuring optimal competitiveness. In light of this, it is timely prudence to now let the company become part of a stronger constellation. It is a particular pleasure that ownership has been retained in Danish hands. This is the best possible solution for both Mac Baren and Halberg.”
STG’s full-year financial guidance for 2024, excluding the impact from the acquisition of Mac Baren, remains unchanged. The integration planning period is expected to take up to 120 days
June 27, 2024