Memorandum by British American Tobacco
THE TOBACCO INDUSTRY AND THE HEALTH RISKS
OF SMOKING (TB 28)
THE BRITISH
AMERICAN TOBACCO
GROUP OF
COMPANIES
58. The British American Tobacco group of
companies, together, comprise the world's second largest international
tobacco business, selling over 240 brands of cigarettes and other
tobacco products in over 180 markets around the world.
59. The origins of the group date back to
1902, with the formation of British-American Tobacco Company Limited
("BATCo"). In 1976, as a result of a court-approved
corporate restructuring, a minority shareholder of BATCo became
its holding company. This holding company was known as BAT Industries
Limited (latterly BAT Industries plc) and both companies maintained
separate corporate existences before and after the transaction.
Over time, a number of diversified businesses were acquired by
BAT Industries plc, including paper and pulp, cosmetics, retail
stores and financial services. By the early 1990s, BAT Industries
plc was a diversified holding company with interests primarily
in tobacco and financial services only.
60. Since 1 January 1996, the worldwide
tobacco operations of the group have been held by a new intermediate
holding company, British-American Tobacco (Holdings) Limited,
known as "British American Tobacco". In this memorandum,
for ease of reading, references to British American Tobacco, when
denoting opinion, refer to this holding company and, when denoting
tobacco business activity including research, refer to the relevant
tobacco operating company or group of companies. Historical references
to activities referred to in this memorandum should, therefore,
be read against this brief corporate profile.
61. In September 1998, BAT Industries plc
underwent a further restructuring in which its holdings in various
financial services businesses, through a series of transactions,
were merged with the financial services holdings of Zurich Insurance
Company. As a result of these transactions, the shareholders of
B.A.T. Industries p.l.c. became shareholders of two newly-created
publicly-listed companies: Allied Zurich plc and British American
Tobacco plc, the latter company becoming the ultimate parent company
of the tobacco operations and of BAT Industries plc. British American
Tobacco (Holdings) Limited continues to be a holding company for
the tobacco interests which it held immediately prior to this
transaction.
62. In January 1999, British American Tobacco
plc announced that it had reached agreement on the terms of a
proposed merger with Rothmans International BV, a subsidiary company
of Compagnie Financiere Richemont AG, a Swiss company, and Rembrandt
Group Limited, a South African company. This transaction was completed
on 7 June 1999 and resulted in the merger of the tobacco operations
held, ultimately, by British American Tobacco plc and Rothmans
International BV and its subsidiary and associated undertakings.
The Rothmans International BV group, at that time, was the fourth
largest international tobacco group selling tobacco products in
over 160 markets around the world. Accordingly, this submission
is presented on behalf of both British American Tobacco and Rothmans
companies in the UK.
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