Back in April, Imperial Brands PLC announced it had reached an agreement with Gemstone Investment Holding Ltd and Allied Cigar Corporation, S.L. to purchase its premium cigar business. Today the tobacco conglomerate has announced that due o the challenges of the COVID-19 pandemic, the parties have agreed to complete both transactions on October 29, 2020 – a slight delay from the origin timetable.
A summary of the agreement:
- Gemstone Investment Holding Ltd will acquire Premium Cigar USA for a total consideration of €185 million (£162 million). This is the business of Tabacalera USA including the brands of Altadis U.S.A., the Internet catalog business of JR Cigars, and Casa de Montecristo retail locations.
- Allied Cigar Corporation, S.L will acquire Premium Cigar RoW for a total consideration of €1,040 million (£912 million). This includes Imperial’s 50% stake in Habanos SA as well as the VegaFina brand, the Tabacalera de Garcia factory in the Dominican Republic and the Flor de Copan factory in Honduras.
In addition, the purchasers have agreed to pay a further non-refundable down payment of approximately €85 million to Imperial by 7 October. Imperial has also agreed to provide a six-month vendor loan of up to €250 million while the purchasers finalize long-term financing arrangements. All other terms remain in line with the announcement of 27 April.
“Gemstone Investment Holding Ltd ” – so now the Communist Chinese are owning and making our cigars? That’s really bad news.