$1.3 Billion Deal For Imperial’s Premium Cigar Business

HAVANA, April 28th  British tobacco giant Imperial Brands PLC has agreed to sell its premium cigar business to an investment consortium for 1.225 billion euros. The sale includes 50 per cent of Cuba’s Habanos S.A., as well as the company that makes and markets a treasure trove of non-Cuban cigar brands such as Montecristo, Romeo y Julieta and H. Upmann, a pair of cigar factories, including one that’s considered the world’s largest, and JR Cigars, one of the world’s biggest cigar retail chains.

Imperial said the premium cigar business delivered $99 million in profits before tax in the year ended September 30, 2019.

The deal, which is taking place in two transactions, has been months in the making, and complicated by the global pandemic and the complex nature of the assets involved. It’s expected to close in the third quarter of this year.

The U.S. division is being acquired for 185 million euros ($200 million) by a company named Gemstone Investment Holding Ltd. That part of the deal includes the corporation Tabacalera USA, its assets Altadis USA, which is responsible for the distribution of premium cigars in the United States, online retailers JR Cigar, Serious Cigars and Cigars.com, plus the Casa de Montecristo retail chain.

A company named Allied Cigar Corporation S.L will acquire the remaining part of Imperial for 1.040 billion euros ($1.13 billion). That part includes half of Cuba’s Habanos S.A., the company that exports all of Cuba’s cigars.

Imperial plans on using the money raised in this sale to pay down debt.

The assets in this deal include:

  • Fifty per cent ownership of Cuba’s cigar company, Habanos S.A., which is headquartered in Havana. Habanos controls the Cuban cigar industry, selling such high-profile items as Cuban Cohiba, Romeo y Julieta and Montecristo cigars, including Edición Limitadas and Regional Editions. The company also operates a vast worldwide chain of high-end cigar stores called La Casa del Habano.
  • Two handmade cigar factories, Tabacalera de Garcia and Flor de Copan. Tabacalera de Garcia, which is located in La Romana, Dominican Republic, is the largest cigar factory in the country and could be the largest cigar factory in the world. Flor de Copan is far smaller, but also makes many cigars.
  • The cigar brands that come with this deal are considerable and include the non-Cuban versions of Montecristo, Romeo y Julieta, H. Upmann, Henry Clay and many more.
  • The retail organization JR Cigar, among the top Internet cigar retailers in the U.S.
  • The chain of Casa de Montecristo cigar stores, high-end stores spread around the U.S. In October, there were 28; one is expected to open soon in Puerto Rico.
    ( www.cigaraficionado.com)