British American Tobacco successfully completes a tender offer for Souza Cruz minority shares and acquires TDR d.o.o., enhancing its market presence in Brazil and Europe.

Target Company Overview

The target company, Souza Cruz, is a leading tobacco manufacturer in Brazil, primarily known for its production of cigarettes. Recently, the group announced a successful public tender offer aimed at acquiring 24.7% of Souza Cruz shares that it does not currently own, consolidating its position in the Brazilian market. Following this acquisition, the group's stake in Souza Cruz will increase to 97.7%, which is expected to facilitate a forthcoming delisting of Souza Cruz as a public entity.

Additionally, the group completed the acquisition of TDR d.o.o., further enhancing its operational reach within the tobacco industry. TDR brings significant tobacco and retail assets, and the acquisition is valued at €550 million.

Industry Overview in Brazil

Despite ongoing challenges, the tobacco industry in Brazil remains resilient. The market grapples with declining volumes, influenced by higher excise taxes and changing consumer preferences towards low-priced segments. Ongo