Brussels, 30/06/2008 (Agence Europe) - On Friday 27 June, the European Commission gave its green light to plans to buy the "cigarettes" activities and certain interests in rolling tobacco and snus (a type of tobacco for oral use) of the Danish company Skandinavisk Tobakskompagni (STK) by the British company British American Tobacco (BAT). The Commission's decision is conditional upon selling off several brands of tobacco, mainly in Norway, where the Commission noted a number of competitive problems.
BAT, whose portfolio already includes the brands Dunhill, Lucky Strike, Kent and Pall Mall, intends to acquire the following subsidiaries of STK: House of Prince A/S in Denmark and its subsidiaries in Sweden, Estonia, Latvia, Lithuania, Poland, the Czech Republic, Hungary and Greece, J.L. Tiedemanns Tobaksfabrik AS in Norway and Fiedler & Lundgren AB in Sweden. STK would keep its activities on the rolling and pipe tobacco and cigar markets, via other companies of the group. The Commission is concerned by the dominant market position on cigarettes in Norway which the operation as proposed would create. The rolling tobacco market is also in question. In order to remedy these competition problems, BAT has proposed to sell off several tobacco brands, including Petterøe's and Tiedemanns Rød. This would neutralise the worst effects of the increase in the share of the cigarette market, and the rolling tobacco market share would be reduced. The Commission has looked at the commitments put forward by BAT and has reached the conclusion that they would help to remove the serious doubts it has voiced and that the proposed operation would not hinder effective competition. (C.D./transl.fl)