Shareholders in PT British American Tobacco (BAT) Indonesia and PT Bentoel International Investama approved on Friday, 4 December 2009, the proposed merger of the two companies.
A statement issued Friday said 99.99 percent of shareholders in Bentoel, the country's fourth-largest tobacco company, and 86.62 percent of shareholders in BAT Indonesia had approved the merger in separate extraordinary meetings.
The merger plan follows the acquisition in June of Bentoel shares by BAT Indonesia in a deal worth USD 494 million (EUR 337.8 million). Under the deal, BAT bought 85 percent of Bentoel at a price of Rp 873 (EUR 0.06) a share.
The statement said that under the proposed merger, all BAT Indonesia shares would be exchanged for Bentoel shares at a ratio of 7.68 percent Bentoel shares per BAT Indonesia share. BAT Indonesia assets and liabilities will be transferred to Bentoel on 1 January next year as the surviving entity. Bentoel will remain listed on the Indonesian bourse.
The merger is expected to help BAT Indonesia diversify into kretek (clove-flavored) cigarettes and strengthen its presence in the Indonesian market, the world's fifth-largest with 250 billion cigarettes produced annually. Kretek cigarettes account for more than 90 percent of the Indonesian market, with regular cigarettes making up the rest. Bentoel sells both types, and its brands include Bentoel, Star Mild, X Mild and Country.
Following the merger, BAT will own a 98.26 percent stake in the new company, assuming all shareholders take up the merged group's shares. Djoko Moeljono will become president commissioner of the merged entity, while Jeremy Pike, previously BAT's director for Africa, will become president director.
The merger is still subject to approval by the market regulator, and is expected to go through in January. (pi)