Excerpts from Swedish Match's interim report out this morning.
Acquisitions
In February Swedish Match acquired the outstanding 40 percent minority in the Turkish subsidiary Swedish Match KAV.
In May, Swedish Match and Gum Tech International Inc. signed a definitive agreement for a joint venture to develop, manufacture, market, and distribute non-tobacco nicotine products.
In the second quarter the acquisition of Brasant Enterprises (PTY) Ltd in South Africa was announced. Brasant is a leading South African Tobacco distributor for Tobacco Speciality, Convenience and Hotel/Restaurant classes of trade and had invoiced sales in 1999 of 60 MSEK.
In May, the Company completed its transaction with General Cigar Holdings Inc. whereby Swedish Match holds 64 percent of the outstanding shares of General Cigar, and the Cullman Family owns the remaining 36 percent.
In June, the Federal Trade Commission voted not to approve the Swedish Match acquisition of National Tobacco's chewing tobacco brands. Both Swedish Match and National Tobacco are pursuing a further review of this transaction in federal courts.
In July, the outstanding minority (5 percent) in Swedish Match Cigars B.V. was acquired from Arnold Andre.
In July, Swedish Match acquired an additional 22 percent of the outstanding shares of Wimco Ltd, from the Jatia family, bringing total share ownership for Swedish Match up to 74 percent of the company.
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Swedish Match included Gum Tech in the section on their most important acquisitions. Doesn't that say something about how important the joint venture with Gum Tech is? The President and CEO of Swedish Match also named the JV with Gum Tech as very important to the future growth of the company during his annual address to Shareholders. Isn't that saying a lot from a company that has a market cap about 10 times Gum Tech? If it affects their growth, it will affect Gum Tech's a lot more. Simple math. Swedish Match owns 51% of the JV. Gum Tech owns 49%. Swedish Match has a market cap of about $1.4 Billion. Gum Tech has a market cap of about $130 Million. Obviously this joint venture will affect Gum Tech to a greater extent than Swedish Match, and Swedish Match think it's going to affect their growth significantly. This stock doesn't even come close to reflecting the value of the JV with Swedish Match, much less the value of Gel Tech. |
