IMPs set for roll-your-own domination

IMPERIAL Tobacco yesterday unveiled plans to become the largest manufacturer of hand-rolled tobacco in the world. The British tobacco giant is paying pounds 652m for famous "roll-your- own" brands such as Drum and Van Nelle to add to its existing Golden Virginia label.

Imperial is buying the tobacco business of Douwe Egberts, the Dutch coffee group, from Sara Lee, the American food goliath. The deal gives Imperial a dominant position in the roll-your-own market. Not only will it supply almost one-third of all hand-rolled tobacco around the world, the group also recently bought Rizla, which accounts for two-thirds of all cigarette paper sales.

Imperial's acquisition also makes it one of the world's largest suppliers of pipe tobacco. Douwe Egberts' leading brand is Amphora which will complement Imperial's current portfolio which includes St Bruno.

Sales of hand-rolling tobacco have been growing in the past few years despite a fall in the overall European cigarette market. The hike in tobacco excise duties has prompted smokers to choose cheaper alternatives. Imperial has been keen to expand abroad as the UK market has been hit hard by "bootlegging" from Continental Europe.

Gareth Davies, Imperial's chief executive, said: "This makes us the world's largest producer of roll-your-own tobacco and gives us extremely powerful brands to expand internationally. It is a great strategic fit for us."

The deal could raise competition concerns in several European countries such as the UK, Ireland and Spain. However, Imperial said yesterday that it was confident it could overcome any competition concerns and analysts pointed out the acquisition was a good geographical fit.

Imperial is already market leader in the UK, with almost 60 per cent of the hand-rolling tobacco market, while Douwe Egberts is market leader in Continental Europe, particularly in the Netherlands, Germany and France. It employs 870 people.

Douwe Egberts was founded in 1753 - confusingly - by Egbert Douwes. The tobacco and coffee business was acquired by Sara Lee in the 1970s and the Americans subsequently bought the Van Nelle brand which also goes back to the 18th-century. But Sara Lee has been keen to sell the tobacco operation which is did not see as a core business.

Imperial Tobacco also has a long history in the cigarette industry.

The group, originally famous for its Woodbines and Players brands, now produces Embassy, Regal and Lambert & Butler. The acquisition fulfils Imperial's target of having 30 per cent of its business overseas, compared to a fifth currently.

Imperial is not buying Douwe Egberts' US tobacco business as it has targeted other international markets for expansion.

Imperial said it could see substantial synergies from the deal which would enhance the group's earnings after it is completed this July.

Shares in Imperial jumped 31p to 458p yesterday as the City welcomed the deal.

Investment, page 22

News
Alex Salmond said he accepted 'the democratic verdict of the people'
newsSNP leader says Scotland must move forward as 'one nation'
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
footballToure's lack of defensive work is big problem for City
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
PROMOTED VIDEO
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week