Imperial Tobacco Group today announced that it will acquire the fourth largest US cigarette manufacturer, Commonwealth Brands.

UK cigarette manufacturer Imperial Tobacco Group has agreed to acquire 100 per cent of CBHC, which trades as Commonwealth Brands, from Houchens Industries for a total cash consideration of US$ 1.9 billion (£974 million).
Imperial Tobacco anticipates that the acquisition will be completed by April 2007. Gareth Davis, chief executive of Imperial Tobacco Group, said: “This acquisition provides us with immediate and significant access to the US market. I am delighted that we will finally have the US as a significant part of our international footprint.”
Commonwealth Brands, based in Bowling Green, Kentucky, is the fourth largest cigarette manufacturer in the US, with 3.7 per cent market share of the 376 billion US cigarette market. It manufactures and sells five high quality discount cigarette brands across the US and in Puerto Rico, which together account for 13.2 per cent of the discount segment. The two key brands are USA Gold and Sonoma.
Commonwealth Brands manufactures its cigarettes in a single factory in Reidsville, North Carolina, where 14 billion cigarettes were produced in 2006, but which has a capacity for 30 billion cigarettes a year.
In the year to 30 September 2006, Commonwealth Brands generated earnings before interest, tax, depreciation and amortisation (EBITDA) of US$ 174 million. Gross assets at 30 September 2006 were US$ 1.2 billion. (pi)