Tobacco merger unlikely to impact Cyprus for several months

BRITISH AMERICAN Tobacco Plc’s announcement on Monday that it was acquiring Rothmans International is not likely to have any impact on the operations of the two cigarette manufacturers on the island for at least several months, Johan Mathijs, BAT’s manager in Cyprus, said yesterday.

“We’ve only learned about the proposed acquisition yesterday, like everyone else,” said Mathijs, a Belgian.

“It is far too early to say what is going to happen here in Cyprus. The proposed acquisition must first be approved by shareholders and then by the European Anti-Trust Commission.”

A high-powered task force, he added, had been set up by the two companies to look into the amalgamation of their activities globally.

The acquisition of Rothmans by BAT combines the world’s second- and fourth- largest cigarette companies in a group worth about $21.3 billion. The new giants will be almost the size of world No. 1 Philip Morris of the United States, but the merger will cause job losses in their combined workforce of 70,000.

The move unites BAT’s major international brands such as State Express 555, Lucky Strike, and Kent with Rothmans’ eponymous brands, Peter Stuyvesant and Dunhill. It also makes a good geographic fit across the globe.

Cyprus is a 1.6-billion-cigarette-a-year market that is worth roughly £70 million, including tax. BAT has 24.6 per cent of the market, according to Mathijs.

BAT employs 120 people in Cyprus and fully owns and runs a production facility which makes such brands as Benson and Hedges, Lucky Strike and John Players Gold Leaf for both local consumption and export.

“Cyprus is a profitable market,” said Mathijs.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.