Bulgaria’s antitrust regulator allows BAT’s €100mn acquisition of Bulgartabac assets

Bulgaria’s antitrust regulator allows BAT’s €100mn acquisition of Bulgartabac assets
By bne IntelliNews May 3, 2017

The Commission for Protection of Competition (CPC) has allowed the €100mn acquisition of assets of Bulgaria’s Bulgartabac Holding by British American Tobacco (BAT), a notice on CPC’s website said on May 2. First announced on April 12, the deal was reported to involve all 23 active cigarette brands of Bulgartabac Holding.

The acquisition will make BAT the cigarette market leader in Bulgaria, boosting its market share to 41.8% from 13.2%. BAT is also buying Bulgartabac’s logistics and distribution business, as well as the retail chain Lafka in Bosnia & Herzegovina.

Bulgartabac Holding was privatised in September 2011, when the state sold an 80% equity stake for €100.1mn. On May 2, the company had a market capitalisation of BGN316.8mn (€162mn), according to data from the Bulgarian Stock Exchange.

CPC approved the transaction on April 25. The deal must also be approved by the antitrust regulators in Bosnia, Kosovo and Albania, where Bulgartabac’s cigarettes are sold. The buyer expects the deal completion to occur in mid-2017. BAT will finance the purchase with its own funds.

BAT will continue to produce the purchased brands at Bulgartabac’s Blagoevgrad cigarette plant for one or two years. After that it will reconsider its plans and review the manufacturing and equipment depending on its strategy. The investor was not interested in Bulgartabac’s factories, most likely because it has many production facilities in the region, Capital Daily reported previously.

In 2016, Bulgartabac Holding reported a loss of BGN16.7mn on revenues of BGN335.5mn, according to unaudited consolidated financial statements. Total assets stood at BGN728.8mn at end-2016, and equity amounted to BGN320.8mn.

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