British American Tobacco
British American Tobacco p.l.c. is a British multinational company that manufactures and sells cigarettes, tobacco and other nicotine products including electronic cigarettes. The company, established in 1902, is headquartered in London, England., it is the second-largest tobacco company in the world based on net sales.
BAT has operations in around 180 countries and its cigarette brands include Dunhill, Kent, Lucky Strike, Pall Mall and Rothmans. Its brands also include Vuse e-cigarettes, Glo heated tobacco, and Velo nicotine pouches.
BAT has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It has a secondary listing on the Johannesburg Stock Exchange. BAT plc ordinary shares are also listed on the New York Stock Exchange in the form of American Depositary Shares.
History
1902 to 2000
The company was formed in 1902, when the United Kingdom's Imperial Tobacco Company and the United States' American Tobacco Company agreed to form a joint venture, the "British-American Tobacco Company Ltd." The parent companies agreed not to trade in each other's domestic territory and to assign trademarks, export businesses and overseas subsidiaries to the joint venture. At its foundation James Buchanan Duke was the chairman, with Henry Herbert Wills the deputy chairman; initial senior managers included Hugo Cunliffe-Owen and Albert Jeffress. Trade was swiftly organised through existing agencies in countries as diverse as Canada, China, Germany, South Africa, New Zealand and Australia, but sales were not conducted in the United Kingdom or in the United States.In China, BAT inherited a factory in the Pudong district of Shanghai from W.D. & H.O. Wills, one of the precursor companies of Imperial Tobacco. Under the management of James Augustus Thomas from Lawsonville, in North Carolina's Rockingham County, by 1919 the Shanghai factory was producing more than 243 million cigarettes per week. Thomas worked closely with the local Wing Tai Vo Tobacco Company, which developed into BAT's principal Chinese partner after its success with the "Ruby Queen" cigarette brand.
In 1911, the American Tobacco Company sold its share of the company following the US Supreme Court ruling on the dismemberment of Duke's corporation. While Imperial Tobacco remained the largest shareholder after this judgement it gradually reduced its shareholding; however, it was only in 1980 that it divested its remaining interests in BAT.
At its peak in 1937, BAT manufactured and distributed 55 billion cigarettes in China. The company's assets were seized by the Japanese in 1941 following their 1937 invasion. In 1949 the company was ejected from China following the foundation of the People's Republic.
In 1976 the Group companies were reorganised under a new holding company, "B.A.T. Industries". In 1994 BAT acquired its former parent, American Tobacco Company. This brought the Lucky Strike and Pall Mall brands into BAT's portfolio.
In 1999 it merged with Rothmans International, which included a share in a factory in Burma. This made it the target of criticism from human rights groups. It sold its share of the factory in 2003 after an "exceptional request" from the British government.
2000 to present
In 2002, BAT lost a lawsuit about the right to sell cigarettes under the Marlboro brand name in the UK. It had acquired Rothmans, which had previously bought a licence to use the name from Philip Morris. Philip Morris' attorneys invoked a get-out clause for the case of a major change of ownership.In 2003, BAT acquired Ente Tabacchi Italiani S.p.A., Italy's state tobacco company. The important acquisition would elevate BAT to the number two position in Italy, the second largest tobacco market in the European Union. The scale of the enlarged operations would bring significant opportunities to compete and grow ETI's local brands and BAT's international brands.
In August 2003, BAT acquired a 67.8% holding in the Serbian tobacco company Duvanska Industrija Vranje , allowing local manufacture of its brands, freeing them from import duties. In the longer term, export opportunities are planned as neighbouring countries in south east Europe developed free trade agreements.
In July 2004, the U.S. business of British American Tobacco was combined with that of R. J. Reynolds Tobacco Company, under the R. J. Reynolds name. R. J. Reynolds and Brown & Williamson were the second and third-ranking U.S. tobacco companies prior to the combination. When they combined, R. J. Reynolds became a subsidiary of Reynolds American, with BAT holding a 42% share.
In January 2007, BAT closed its remaining UK production plant in Southampton with the loss of over 600 jobs. However, the global research and development operation, and some financial functions, continue on the site.
Then in 2008, BAT acquired Turkey's state-owned cigarette maker Tekel.
In July 2008, BAT acquired the cigarette and snus operations of the Scandinavian Tobacco Group.
BAT acquired 60% of Indonesia's Bentoel Group in 2009 before increasing its stake to 100% the following year.
In May 2011, BAT acquired the Colombian company Productora Tabacalera de Colombia S.A.S..
In October 2015, BAT acquired the Croatian tobacco company TDR d.o.o. Brands and Factory in Kanfanar.
In October 2016, BAT offered to buy the remaining 57.8 per cent of U.S. cigarette maker Reynolds American in a $47 billion takeover that would create the world's biggest listed tobacco company with brands including Newport, Lucky Strike and Pall Mall. In January 2017, Reynolds agreed to an increased $49.4 billion deal. The deal was completed in July 2017.
In April 2017, the company announced the acquisition of a number of Bulgarian cigarette brands from Bulgartabac for more than €100 million.
In March 2021, the company bought a stake of close to 20% in the Canada-based cannabis producer OrganiGram for about £126 million as part of a diversification strategy.
In May 2023, the company's chief executive, Jack Bowles, resigned with immediate effect. He was replaced by Tadeu Marroco, who had been finance director for four years.
On 14 September 2023, the company announced the sale of BAT Russia to a consortium led by local management. BAT Russia changed its name to the International Tobacco Marketing Services Group.
Operations
The company offers an extensive range of brands:Current
Global brands include Dunhill, Kent, North State, Lucky Strike, Pall Mall, Vogue, Rothmans International, Winfield, State Express 555, KOOL, and Viceroy. BAT does not necessarily own the rights to all of these brands in every nation they are marketed.Local brands owned by British American Tobacco include: Benson & Hedges, John Players Gold Leaf, Dunhill, Lucky Strike, Hollywood, Derby, State Express 555, Belmont, Jockey Club, Stradbroke, Hollywood, Derby, Free, Minister and Plaza, du Maurier, Prince, North State, HB, Sopianae, Wills, Ardath, Bentoel, and Tali Jagat, Carrolls, Carrolls Kings, Grand Parade, Black Allen, Sweet Afton, Major, Boots, Alas, Gold Leaf, Jan III Sobieski, Yava Gold, Courtleigh, Peter Styvesant, Kent, Pall Mall, Perilly's, Peter Stuyvesant, and Rothmans, Parisienne, Kent and Maltepe, Xon, Astra and Karvon, Craven A as well as BAT snus, Holiday, Freedom and Park Drive, Royals, Embassy, Viceroy, Newport, Lucky Strike in Dominican Republic and Delta in El Salvador.
On 11 June 2006, R. J. Reynolds Tobacco Company announced that it would manufacture Camel brand snus in Sweden in partnership with British American Tobacco; the product would be test-marketed in Portland, Oregon and Austin, Texas by the end of the month.
Former
BAT has diversified into various fields at different times in its history. Its U.S. retail division, BATUS Retail Group, acquired Gimbels, Kohl's, and Saks Fifth Avenue in the 1970s and Marshall Field's and its divisions in 1982. It purchased the United Kingdom retail chain Argos in 1979. The company sold Kohl's grocery stores to A&P in 1983. In 1986, BATUS sold the Kohl's department stores and two Marshall Field's divisions, The Crescent and Frederick & Nelson; BATUS closed Gimbels the same year, with many locations being absorbed by sister division Marshall Field's, as well as Allied Stores' Stern's and Pomeroy's divisions. In 1990, Dayton Hudson Corporation purchased Marshall Field's, Dillard's purchased Ivey's, Investcorp S.A. purchased Saks Fifth Avenue, and Argos was demerged.The Group was a major financial services company with the acquisitions of Eagle Star, Allied Dunbar and the Farmers Group, Inc.. Around 1996 British American Tobacco merged its financial operations into a single operating unit, British American Financial Services. This division merged with Zurich Insurance Company in 1998 to form the Zurich Financial Services Group.
Corporate affairs
The company's board is chaired by Luc Jobin, appointed in 2021. Its non-executive board members are Holly Keller Koeppel, Kandy Anand, Karen Guerra, Murray Kessler, Véronique Laury, Darrell Thomas and Serpil Timuray.Other affiliates
British American Tobacco Ghana Limited is a public limited company operated by British American in Ghana. The company is listed on the stock index of the Ghana Stock Exchange, the GSE All-Share Index. It was formed in 1999 out of a merger between the Pioneer Tobacco Company and Meridian Tobacco.Sponsorships
BAT have found many imaginative ways over the years to keep its brands in the public eye. ITC Limited, in which BAT holds a minority share, as recently as 1996 secured an arrangement to sponsor the Cricket World Cup which was branded the "Wills World Cup" and thereby achieved a high level of brand recognition for the Wills cigarette brand in India where young cricket fans were a key target market.BAT previously sponsored the London Symphony Orchestra.
Furthermore, BAT established The British American Tobacco Internship programme which is designed to help new graduates gain experience in their chosen field of study in a dynamic global organization.