Imperial Brands to sell premium cigar business

Imperial Brands confirmed on Tuesday that it plans to sell its worldwide premium cigar business as part of the divestment programme that was announced in May last year.

The tobacco company said that while Premium Cigars has performed well over a number of years, with good revenue and profit growth, it is a luxury business with a different consumer base and route to market relative to its other businesses.

"The sale of the business provides an attractive opportunity to realise shareholder value," it said.

The divestment programme, which supports the group's ongoing simplification agenda and will release capital to pay down debt, is expected to generate proceeds of up to £2bn by May 2020, if not earlier.

So far, the group has realised £280m from the sale of a portfolio of other tobacco products in the USA and a further 9.99% in tobacco distribution company Logista. It said "significant" progress has been made with a number of other divestment opportunities, with the priority of maximising shareholder returns.

"Recognising that tobacco valuations have come under some pressure in the last 12 months, assets will be sold only if they will realise appropriate value," Imperial said, adding that while various options for Premium Cigars are being evaluated, there can be no certainty that any transaction will take place or as to the terms of any such deal.

At 1445 BST, the shares were flat at 2,428.50p.