Britain's Imperial Tobacco has made a long-awaited cash bid for Altadis, valuing its Franco-Spanish rival at € 11.5 billion (US$ 15.2 billion).

Imperial, the world's fourth-largest cigarette group with brands such as Lambert & Butler, West and Davidoff, said discussions were at an early stage and there could be no certainty that the approach would lead to a formal offer. Some analysts argue that Imperial might have to pay more, since the offer was 12.5 times the 2007 forecast earnings that Japan Tobacco is paying in a £ 7.5 billion cash deal for Gallaher Group, yet Altadis has a better business and stronger brands.
The approach brings to a head more than two years of speculation that Altadis was in Imperial's sights. Hostile bids are viewed as difficult to execute in the tightly regulated tobacco sector and have not been attempted in recent years. A takeover of Altadis would be the biggest in the industry in Europe and the largest by Imperial Tobacco since it bought Reemtsma Cigarettenfabriken of Germany in 2002.
Gauloises and Fortuna cigarette-maker Altadis said Thursday (15 March) the unsolicited offer at € 45 a share, made late Wednesday, was dependent on approval by the Madrid-based company's board, which meets in the next few days to discuss the offer. Previously, Altadis – formed by the merger of Spain's Tabacalera and France's Seita in 1999 – has repeatedly said it sees itself as a buyer of assets, not a target, and has no plans to sell any of its three units, cigarettes, cigars and logistics.
Speculations also persist in the press on the possibility of Philip Morris International bidding for Imperial.