Posted on 14 February 2011
BAT’s strike it lucky in Turkey
BAT bids $1.72 billion for TEKEL
British American Tobacco Plc, the makers of Dunhill, Kent and Lucky Strike, has bid $1.72 billion to win an auction for Turkish cigarette maker Tekel. If the sale is approved, BAT will have a 36 percent market share in Turkey.
BAT beat rival bidders including Citigroup Venture Capital International, private equity firm Cinven Ltd., and Turkey’s Dogan Holding, said Ahmet Aksu of the government’s asset sales agency, who chaired the auction in Ankara Friday.
The sale was Turkey’s third attempt to offload Tekel under a $10 billion International Monetary Fund loan accord that aims to cut the state’s role in the economy. The cigarette maker’s value was estimated at between $1 billion and $1.6 billion by JPMorgan Chase & Co. analysts last year.
In January the Turkish Government passed legislation to ban smoking in public areas, including restaurants and bars. The restrictions take effect in April, with an exception for bars, cafes and restaurants, which have 18 months to become smoke-free.
Tekel is British American Tobacco’s first major acquisition since the London-based bought Italy’s former state-owned tobacco company in 2003.
Tekel employs 15,313 people.
he government rejected a $1.15 billion offer for Tekel from Tokyo-based Japan Tobacco Inc., the world’s second-biggest publicly traded cigarette maker, in 2003.
Abridged – ANKARA Bloomberg February 23, 2008