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Imperial Brands To Sell Worldwide Premium Cigar Business For €1.23 Bln; Stock Up

Shares of Imperial Brands plc. (IMB.L,IMBBF.PK,IMBBY.PK) were gaining around 4 percent in the morning trading in London after the tobacco company announced Monday that it has agreed the sale of its worldwide premium cigar businesses for 1.23 billion euros or 1.07 billion pounds.

The disposals are expected to realise net cash proceeds of around 1.09 billion euros or 958 million pounds. The proceeds will be used for debt reduction.

The Premium Cigar business contributed 80 million pounds of profit before tax in the year 2019.

The sale will be completed in two distinct transactions. Gemstone Investment Holding Ltd will acquire Premium Cigar USA for a total consideration of 185 million euros.

Allied Cigar Corp. S.L will acquire Rest of the World business, Premium Cigar RoW, for a total consideration of 1.04 billion euros.

The transactions are expected to close in the third quarter of calendar year 2020. The Premium Cigar RoW transaction includes the sale of the Dominican Republic handmade premium cigar factory which is expected to close in 2021.

Joint Interim Chief Executives Dominic Brisby and Joerg Biebernick said, "This disposal reinforces our strategic ambition of becoming a leaner and more agile organisation and the proceeds will realise value for shareholders by reducing debt as part of our ongoing focus on active capital management."

In London, Imperial Brands shares were trading at 1,601.90 pence, up 3.58 percent.

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