Swedish Match has announced that it intends to separate its cigar business via a spin-off to shareholders and to completely exit the manufacturing of combustible tobacco products.

Swedish Match has initiated preparations for a separation and a subsequent listing on a major US securities exchange, with a final decision on execution subject to various considerations. The separation is expected to be completed during the second half of 2022, at the earliest.
For more than 20 years, Swedish Match has been a pioneer in the transformation of its business model away from combustible tobacco, starting with the divestiture of its cigarette business in 1999, and later with its divestitures of pipe tobacco, premium cigars, and its non-US machine made cigar business. After conducting a thorough strategic review of its businesses, the announcement of the planned separation of the US cigar business marks the “next chapter in this transformation, where smoke-free products such as nicotine pouches and snus will play the leading role in building a stronger Swedish Match in line with societal trends”.
The intended separation of the cigar business provides even greater focus on building Swedish Match’s presence in the growing modern oral category, while also providing opportunities and greater flexibility for the stand-alone cigar business to execute its own strategic plans toward delivering strong value as an independent company. As a stand-alone company, the cigar business will be able to explore a broader scope of growth opportunities, and to optimize its operational set-up and capital structure, among other benefits, Swedish Match said in a statement.
The cigar business has solid positions in both the natural leaf and homogenized tobacco leaf segments of the US mass market cigars category and holds the number two market position with approximately 23 per cent of the market measured by number of sticks. Since 2015, volumes have grown at a compounded annual rate of close to 10 per cent from more than 1.2 billion sticks to more than 1.9 billion sticks in 2020, driven by robust growth for natural leaf varieties.
The portfolio includes such iconic brands as Garcia y Vega, Game, 1882 and White Owl.