Tabacalera, Seita seek tobacco merger
10/04/99
Cigarette company Seita, maker of France's Gitane and Gauloise brands, and Spain's Tabacalera said on Monday they were discussing an alliance that could form the world's fourth biggest tobacco group.
A source close to the deal said Seita and Tabacalera aimed to try to finalise terms for a full merger on Monday evening or on Tuesday.
Analysts said a merged group, with a combined market capitalisation of 6.7 billion euros ($7.2 billion), made sense given rapid consolidation in the shrinking world tobacco market.
Speculation about a possible tie-up has swirled repeatedly since the two firms forged a joint venture called Global Tobacco in 1998 to reinforce their international interests.
The two were also alleged to have joined forces in a failed bid for RJR Nabisco's (NYSE:RN - news) non-U.S. tobacco business which it sold to Japan Tobacco in March.
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