Imperial Brands Plans to Sell Premium Cigar Business
(Bloomberg) -- Imperial Brands Plc plans to sell a premium cigar business that includes a joint venture distributing Cohiba cigars from Cuba.
The U.K. tobacco company said it plans to sell the operations to pay down debt and boost investment. The businesses being sold include the Cuban venture as well as Imperial’s own U.S. and international premium cigar units.
The move is part of a plan the company announced last year to raise as much as 2 billion pounds ($2.6 billion) by 2020 through asset sales, Imperial Brands said Tuesday. So far the company has raised 280 million pounds.
Imperial’s profit has been weighed down by investments in e-cigarettes, in particular to boost its Blu brand. The company is under pressure from rivals with bigger investment budgets and more popular brands.
Under the 50-50 joint venture in Cuba, Imperial distributes and sells cigars under the Cohiba, Romeo y Julieta and Montecristo brands. The sale offers a rare opportunity for another investor to take a business interest in the island nation, which has been isolated by U.S. sanctions for years.
Imperial also has a mass-market lower-end cigar business, and owns the international rights to Davidoff cigarettes, which it sells alongside the Gauloises and West brands.
AZ Capital is advising Imperial on the possible sale.
©2019 Bloomberg L.P.