BAT to buy remaining stake of its Brazilian unit

23rd Feb 2015 15:23

Tobacco industry giant British American Tobacco (BAT) is set to buy out the minority in its Brazilian arm for about $3bn (£1.94bn).BAT already owns 65.3% of Souza Cruz SA and will pay 26.75 reais (£6.03) per share in cash for the remaining shares, which represents a 13% premium on the group's closing price in Sao Paulo on Friday.The deal, which BAT described as "strategically attractive", would give the tobacco giant full control of the largest tobacco maker in Brazil, a market in which the London-based group already has a market share of about 78%.A deal would be "easy to do with little objection likely from the Brazilian government, as there does not appear to be a lot of political capital to be maintained by remaining listed," Berenberg's analyst Erik Bloomquist was quoted as saying by Bloomberg."Souza Cruz would remain a powerful corporate in Brazil."BAT shares were up 1.24% to 3,701.50 at 15:50 on Monday.