Altadis, the new tobacco giant formed by Spain's Tabacalera and France's Seita , should achieve annual earnings growth of 15 percent from 2001, the companies said in a joint statement.

The new group's sales are forecast to grow five percent a year between now and 2003, while earnings before interest, tax, depreciation and amortisations (EBITDA) should be one billion euros ($1.1 billion) in 2001 and should grow by 15 percent a year from 2001 onwards. Both companies are already involved in a cost-cutting restructuring process. ``By the merger of Tabacalera and Seita, the creation of Altadis assumes there is additional potential for achieving higher growth and improved profitability,'' the statement said. The companies are merging by offering Seita shareholders 19 Tabacalera shares for every six Seita shares they own plus an extraordinary dividend of five euros a share, as long as the offer is a success. The merger creates a European tobacco firm big enough to rival the world's three biggest quoted tobacco companies, Philip Morris, Japan Tobacco and BATand is part of a wave of consolidation in the industry. It will rank fourth worldwide in cigarette production, excluding the Chinese state-owned industry, and will be the number one cigar maker with a market share of 24.7 percent in 1998 and a production of more than three billion cigars.

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