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British American Tobacco gets a flavour of Indonesia at £303m
17.06.09
British American Tobacco today struck a £303 million deal to buy a major Indonesian flavoured-cigarette manufacturer.
The deal to take over 85% of Bentoel Internasional comes as part of the group's drive to expand in emerging markets where smoking is not in the rapid decline seen in the western world.
Bentoel makes kreteks, which are cigarettes made from tobacco and cloves to give a distinctive flavour. Its brands include Star Mild, X Mild and Sejati.
In the vast nation of Indonesia, kreteks make up about 93% of cigarettes sold, with Bentoel holding around 18% of that market.
Indonesia is the fifth-biggest tobacco market in the world by volume, with sales of about 250 billion cigarettes a year.
BAT paid a premium of 20% above Bentoel's share price on Monday. After buying the 85% stake, BAT will buy the rest of the shares.
