Manufacturer British American Tobacco

Windsor House
50 Victoria Street
London SW1H 0NL
United Kingdom
http://www.bat.com/

British American Tobacco PLC is the second largest international tobacco holding company in the world. It sells 300 tobacco brands in 180 markets, has a 15% global market share, and manufactures and processes tobacco products in more than 66 nations. It is based in London and is a constituent of the FTSE 100 Index with a market capitalisation of over 20 billion as of June 2005.

Established in 1902, when the United Kingdom’s Imperial Tobacco Company and the American Tobacco Company of the USA agreed to form a joint venture, the British-American Tobacco Company Ltd. The British American Tobacco business thus began life in countries as diverse as Canada, China, Germany, South Africa and Australia, but not in the United Kingdom or USA.

In 1911 the American Tobacco Company sold its share of the company. Imperial Tobacco gradually reduced its shareholding, but it was not until 1980 that it divested its remaining interests in the company.

In 1976 the group companies were reorgansied under a new holding company, B.A.T Industries. In 1994 BAT acquired its former parent, American Tobacco Company (though reorganised after anti-trust proceedings). This brought the Lucky Strike and Pall Mall brands into BAT’s portfolio.

In 1999 it acquired Rothmans International, which included a share in a factory in Myanmar. It sold its share of the factory on November 6, 2003 after a “exceptional request” from the British government.

In 2003, BAT acquired Ente Tabacchi Italiani (ETI) S.p.A, Italy’s state tobacco company. The important acquisition would elevate BAT to the number two position in Italy, the second largest tobacco market in the European Union. It acquired Saks Fifth Avenue in 1973 and the United Kingdom retail chain Argos in 1979. In 1990 Saks Fifth Avenue was sold to Investcorp S.A. and Argos was demerged (Argos was acquired by now parent GUS plc in 1998).

The group was a major financial services company with the acquisitions of Eagle Star (1984), Allied Dunbar (1985) and the Zurich Insurance Company in 1998 to form the Zurich Financial Services Group.

The success of Formula One motor racing has largely been built on tobacco sponsorship, including that of BAT.

British American Tobacco Brands

International Brands include Dunhill, cigs4us.biz/kent-cigarette, State Express 555, Pall Mall, Rothmans, Peter Stuyvesant, Benson & Hedges, Winfield, John Player, cigs4us.biz/lucky-strike-cigarette, Kool, and Viceroy. However, British American Tobacco does not necessarily own the rights to all of these brands in every nation they are marketed.

Local brands owned by British American Tobacco include, Jockey Club (Argentina), Stradbroke (Australia), du Maurier (Canada), North State (Finland), HB (Germany), Sopianae (Hungary), Wills (India), Ardath (Indonesia), Carrolls (Ireland), Boots (Mexico) Jan III Sobieski (Poland), Yava Gold (Russia), Courtleigh (South Africa), Parisienne (Switzerland), GPC (United States) and Xon (Uzbekistan), as well as BAT snus.

On June 11, 2006, Reynolds Tobacco announced that it would be manufacturing Camel brand snus in Sweden in partnership with British American Tobacco; the product would be test-marketed in Portland, Oregon and Austin, Texas by the end of the month.

BAT has also used the glamour of motor sport to promote its brands, most notably in its setting up of British American Racing. Although Formula 1 is an exceptionally expensive sport, for BAT the high cost of running an F1 team is justified as a promotional expense because other brand promotion ( for Lucky Strike) options are not available in many markets.

Chronology

* Key Dates:
* 1902: The company incorporates in England as British American Tobacco, Limited.
* 1911: The company is adjudged as an illegal monopoly by the U.S. Supreme Court.
* 1923: The company begins to decentralizes its operations in China and other international operations.
* 1927: The company acquires Brown and Williamson, a U.S. tobacco producer in North Carolina.
* 1962: The company makes its first moves toward diversification, acquiring Mardon Packaging International and Wiggins Teape Ltd., two paper companies.
* 1965: British American Tobacco, Ltd. begins to acquire perfume houses and department stores.
* 1976: The company changes its name to BAT Industries Limited.
* 1982: BAT acquires Eagle Star, a British insurance group.
* 1985: BAT purchases Hambro Life Assurance, and then renames the British firm Allied Dunbar.
* 1988: BAT expands its financial services and acquires Farmer’s Group Inc. in the United States.
* 1988: Sir James Goldsmith launches a hostile leveraged buyout.
* 1989: The company begins selling off non-tobacco subsidiaries.
* 1994: The company begins major tobacco acquisitions.
* 1998: BAT Industries Ltd. spins off remaining non-tobacco businesses into an independent company and changes its name to British American Tobacco, PLC.
* 1999: The acquisition of Rothman’s makes British American Tobacco the world’s second largest international tobacco company.
* 2000: BAT acquires Imasco, Canada’s dominant tobacco company.

Principal Subsidiaries: B.A.T. Capital Corporation; B.A.T. International Finance PLC; BATMark Ltd.; British American Racing (Holdings) Ltd.; British American Tobacco (1998) Ltd.; Ciberion Ltd.; ITC Ltd. (32%); Skandinavisk Tobaskcompagni AS (26%); VST Industries Ltd. (32%).

Principal Competitors: Philip Morris; Japan Tobacco; Gallaher.

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