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Last Updated: Wednesday, 18 July 2007, 08:34 GMT 09:34 UK
Altadis agrees to Imperial offer
Worker at Altadis cigarette factory
Altadis rebuffed Imperial's 8bn takeover attempt in April
Britain's Imperial Tobacco has agreed to buy Franco-Spanish rival Altadis for 16.2bn euros ($22.4bn; 11bn).

Imperial said on Wednesday it would pay 50 euros a share for Altadis - an increase from an earlier offer of 47 euros a share which had been rejected.

Altadis had also received a proposal from private equity firm CVC Capital Partners, also worth 50 euros a share.

But Altadis has now said it will back the Imperial deal, in the absence of a higher offer.

IMPERIAL'S BRANDS
Lambert & Butler
Richmond
West
Davidoff

The move will join together the world's fourth largest cigarette group, Imperial, and the fifth, Altadis.

The combined firm will close the gap with the world's top three groups: Altria, British American Tobacco and Japan Tobacco.

Imperial said the deal, which would create cost savings of 200m a year, would be partly funded by a new rights issue of up to 5.4bn.

"Imperial Tobacco and Altadis are a great strategic fit, which will consolidate our position as the world's fourth largest international tobacco company," said Imperial chief executive Gareth Davis in a statement.

ALTADIS' BRANDS
Gauloises
Gitanes
Fortuna
Montecristo cigars

Speculation about an Imperial-Altadis deal emerged in December 2004, and on 14 March, 2007, Imperial made a cash indicative bid for Altadis at 45 euros a share, which was rejected.

In April, Imperial's improved bid of 47 euros a share - valuing Altadis at about 12bn euros ($16bn; 8.2bn) in all - was also rejected as too low.

Private equity groups CVC Capital Partners and PAI Partners made a 50 euro bid on 4 May. By the end of the month PAI had withdrawn and CVC said was to go ahead alone with the bid.




SEE ALSO
Sales rise lifts Imperial Tobacco
01 May 07 |  Business
CVC may be rival Altadis bidder
13 Apr 07 |  Business
Altadis snubs fresh Imperial move
10 Apr 07 |  Business
Imperial may buy Gauloises firm
15 Mar 07 |  Business
Imperial buys US cigarette firm
08 Feb 07 |  Business
Imperial not worried by smoke ban
31 Oct 06 |  Business

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