Brussels, 08/05/2002 (Agence Europe) - The European Commission has given conditional approval to the proposed acquisition of German cigarette manufacturer Reemtsma Cigarettenfabriken GmbH by the UK's Imperial Tobacco Group Plc. The deal will propel Imperial Tobacco into fifth position in the world cigarette market and third in the EU. The Commission explains that the deal raised competition concerns in the UK market for cut-price cigarettes, but the undertakings offered fully address these concerns. With a leading position in the UK market, Imperial Tobacco manufactures and sells a range of tobacco products, including Superkings, Lambert and Butler, Embassy, John Player Special, Regal and Richmond cigarette brands, Drum rolling tobacco and Rizla cigarette papers. Reemtsma is currently the world's fifth largest cigarette manufacturer and a leading supplier in Germany and several East European countries. It supplies leading cigarette brands West and Davidoff. Whilst the acquisition will result in substantial additions of market shares in several markets, the Commission felt that the activities of the parties were mostly complementary and did not pose any substantial competition concerns, apart from in the UK cut-price cigarette market where Imperial Tobacco was already very strong. Reemtsma's UK business owns many of the own-label cigarette trademarks of supermarkets and cash-and-carries, such as the Red Band trademark, contrary to its usual situation, even if exclusivity in the short term is granted to distributors because although willing to sell cigarettes, supermarkets don't want to see their name associated with this type of product. Imperial Tobacco's acquisition of Reemtsma would risk putting the distributors in a weak negotiating position vis-à-vis Imperial Tobacco as they could experience significant difficulty in changing their supplier. To alleviate these concerns, Imperial Tobacco has undertaken not to develop the trademarks for its own account and to maintain the exclusivity distributors currently enjoy and the Commission has authorised the deal.