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BAT bags Turkish tobacco firm

Latest update : 2008-02-22

British American Tobacco's $1.72-billion bid won the auction for Turkish state-owned cigarette company Tekel, bringing BAT's share of the Turkish market to 36%.

British American Tobacco (BAT) on Friday won an auction for Turkey's state-owned tobacco company Tekel with a bid of 1.72 billion dollars (1.16 billion euros) in Ankara's third effort to sell the company.
The London-based BAT beat three other bidders in the televised auction to win the asset-only sell-off which includes Tekel's six factories in Turkey.
One of the other bidders included a consortium between Turkish conglomerate Dogan Holding, Citi Venture Capital International (CVCI) and Turkish cigarette wholesaler TUTSAB.
The remaining two were a group bringing together private equity firm CINVEN and a group of Turkish businessmen, and a venture between Turkish construction company LIMAK and Morgan Stanley's Turkey investment Fund, PI Turkey.
Turkey's Competition Board and privatization authorities must now approve the sale for the takeover to be finalized.
This was Turkey's third attempt to sell TEKEL.
In 2003, Japan Tobacco International won the first tender with 1.15 billion dollars, but Ankara scrapped the tender on the ground that the bid failed to meet its expectations.
A second tender in 2004 failed to draw any offers.
Tekel controls about 30 percent of the tobacco market in Turkey where parliament recently passed a bill banning smoking in public places. The ban is set to come into effect in April.
The company employs some 15,300 people and posted a loss of 339.7 million Turkish liras (282 million dollars, 191.3 million euros) in 2006. The company has not announced financial data for 2007.
Privatisation is a key element in Turkey's economic programme, backed by a 10-billion-dollar loan from the International Monetray Fund, as it consolidates its recovery from two severe financial crises in 1999 and 2001.

Date created : 2008-02-22