Scandinavian Tobacco Group goes public

Scandinavian Tobacco Group A/S («Scandinavian Tobacco Group» or the «Group»), a world leading producer of cigars and traditional pipe tobacco, announces its intention to launch an Initial Public Offering («IPO») and to list on Nasdaq Copenhagen.

Selling forty percent

The contemplated IPO is expected to consist of a sale of up to 40 percent of the existing shares, on an equal basis, by the Group’s two shareholders, Swedish Match Cigars Holding AB («Swedish Match») and the two Danish foundations The Augustinus Foundation and The Obel Family Foundation via Skandinavisk Holding II A/S («Skandinavisk Holding»). Prior to the Offering, the Group is ultimately owned by The Augustinus Foundation and The Obel Family Foundation (51%) and by Swedish Match AB (49%). The Danish foundations have roots in the tobacco industry dating back more than 250 years. Swedish Match AB is listed on Nasdaq Stockholm.

The contemplated IPO is a natural next step for the Group and follows the combination in 2010 of the cigar, pipe tobacco, fine-cut tobacco and tobacco-related accessories businesses of Scandinavian Tobacco Group and the similar activities of Swedish Match (excluding Swedish Match’s US machine-made cigars business).

The contemplated IPO marks an important milestone for the Group, providing a strong platform for future growth by enhancing the visibility of the company, further improving the ability to attract and retain key employees as well as diversifying the shareholder base, among other benefits.

-The contemplated IPO marks the culmination of the journey embarked upon in 2010 when we created a global leader with scale and a highly recognised and diversified brand portfolio within cigars, pipe tobacco and fine-cut tobacco. Since then, the management team has commenced the implementation of several initiatives which define a new strategy for our brand portfolio, improve production processes and right-size the production capacity. We now have multiple avenues for growth of the business as well as a strong platform to act as consolidator in a fragmented industry. I am pleased to chair Scandinavian Tobacco Group and believe that with its more than 8,000 dedicated employees across the world the company is very well positioned to execute its strategy for the future. I am excited to see the company go public and welcome new shareholders to take part in Scandinavian Tobacco Group’s development,says Jørgen Tandrup, Chairman of Scandinavian Tobacco Group to Nordic News.

Strong and diverse portefolio

-Scandinavian Tobacco Group has an attractive and stable business due to our strong and diverse brand portfolio and the global presence of our business. We have successfully maintained and expanded our market leadership in our cigar, pipe tobacco and fine-cut tobacco markets and we have a clearly defined strategic agenda to continue to improve profitability. Over the past years, we have worked to grow our net sales and have implemented production efficiency initiatives in our supply chain to improve profitability and cash generation. We have also expanded in important areas, including our fast-growing US online and catalogue business which provides unique insights and relationships with our end-consumers. I am confident that we have the right management team and platform in place, and I am pleased to continue to lead the execution of our strategy after Scandinavian Tobacco Group has become a public company, says Niels Frederiksen, CEO of Scandinavian Tobacco Group to Nordic News.

New Board of Directors:

In connection with the contemplated IPO, changes will be made to the Board of Directors. Søren Bjerre-Nielsen, Dianne Neal Blixt and Luc Missorten will be elected as new independent board members of Scandinavian Tobacco Group immediately prior to completion of the IPO. The new members bring extensive and diverse board experience from international public and private companies.
Søren Bjerre-Nielsen (born 1952, Danish national) has previously served as executive officer of Danisco A/S (now Dupont Nutrition Biosciences ApS). He currently serves as chairman of the board of directors of Danmarks Nationalbank, MT Højgaard A/S, Højgaard Holding A/S, VKR Holding A/S, Højgaard Industri A/S and Velux A/S.

Dianne Neal Blixt (born 1959, US national) has held senior positions at the Reynolds Tobacco Group, most recently as Executive Vice President and CFO of Reynolds American, Inc. Ms Blixt currently serves as a member of the board of directors of Ameriprise Financial Services, Inc. and as the chairperson of the board of trustees of Reynolda House Museum of American Art. Ms Blixt also currently serves as a member of the board of managers of NatureWorks Organics LLC.

Luc Missorten (born 1955, Belgian national) has previously served as the chief executive officer of Corelio NV . Mr Missorten currently serves as chairman of the board of directors of Ontex Group NV. He also currently serves as a member of the board of directors of Barco NV, Recitel NV/SA, GIMV NV and Corelio NV.

In connection with the election of Søren Bjerre-Nielsen, Dianne Neal Blixt and Luc Missorten to the Group’s Board of Directors, Anders Obel, Lars Dahlgren and Fredrik Lagercrantz will resign from the Board of Directors. Hereafter, the Board of Directors will consist of eight members elected by the general meeting, seven of whom will be considered independent, and four members elected by the employees.

Global co-ordinators and bookrunners:

J.P. Morgan Securities Ltd. («J.P. Morgan») is acting as Lead Global Coordinator, and together with Deutsche Bank AG, London Branch and Nordea Markets (division of Nordea Bank Danmark A/S) as Joint Global Coordinators and Joint Bookrunners. Carnegie Investment Bank has been appointed Co-lead Manager. FIH Partners is acting as financial advisor to Scandinavian Tobacco Group.