British American Tobacco Investment Strategies: Past 5 Years

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Investment strategy The information provided below have been mainly extracted from the Annual Reports of the five-year period subject to analysis. INTRODUCTION BOOK In the last five years, the tobacco industry has remained fairly stable, with little M&A activity undertaken by the leading industry players. British American Tobacco aims to increase its market share and to become the biggest publicly-listed tobacco company. In pursuing this intention (objective, goal), the company has completed a number of strategic investments and partnerships focused on its future growth. The analysis is conducted on a year-by-year basis, highlighting the most important M&A activities undertaken by the company. 2011 has been an…show more content…
The brand also involved in the agreement, Shuang Xi, was successfully launched in new markets, such as Russia, Pakistan and Poland. Moreover, in the same year the company signed an agreement for another joint venture with a Myanmar company, IMU Enterprise, part of the SWH group. The agreement provides the manufacture, distribution and marketing of the UK-based company’s brands. Thanks to these partnerships the total revenues for the Asia-Pacific region grew by 1.2% (at constant rate of exchange), especially driven by an increase of volume mixed to an increase of price in Pakistan, Bangladesh, Taiwan, Japan and Malaysia. In 2014 the company stopped its share repurchase program to take part in the big deal involving the RAI’s acquisition of Lorillard. The acquired firm was the third largest American tobacco company and the oldest continuously operating tobacco company in the United States. BAT invested £3.9bn ($4.7bn) in this deal to maintain its stake of 42% in Reynolds, which thanks to this acquisition became the second largest tobacco company in the US behind Philip Morris International. This investment led to a 2% increase (at constant rates of exchange) in the total contribution of Reynolds for the year 2014 and an increase of the share of post-tax results of associates and joint ventures of almost 25% (at constant rate of exchange) in 2015. This investment, together with the acquisition of the remaining

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