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Home > What's New > Swedish Match Buying General Cigar
Swedish Match Buying General Cigar
Posted: Thursday, February 24, 2005
By David Savona Excerpted from the February 22 Cigar Insider
The Cullman family is selling its remaining interest in General Cigar Holdings Inc., the maker of Macanudo cigars and one of the crowning jewels of the premium cigar business. Swedish Match AB, which already owns 64 percent of General, agreed in principle on Tuesday to acquire the remainder of the company, exercising a call option from 2000.
The price of the deal has not been disclosed. The acquisition is expected to be complete by April 1.
General Cigar's assets include handmade cigar factories in the Dominican Republic and Honduras, the U.S. rights to some Cuban cigar brands and around 1,000 acres of land in the Connecticut River Valley. General is a major grower of Connecticut-shade tobacco.
The Cullmans have agreed to participate in managing General's day-to-day operations for the remainder of the year, but after 2005 they will no longer be a part of the company they shaped for decades. It will be the first time in 44 years a Cullman will not own part of General.
"It's a bittersweet thing," said Edgar M. Cullman Jr., General Cigar's chief executive officer, in a phone interview. "It's especially tough for my father [General Cigar chairman Edgar M. Cullman] who has spent his life in the business. I spent half my life in the business."
Cullman Jr. said his father was "very emotional" about the sale.
Swedish Match -- which is a leading producer of smokeless tobacco, snuff, chewing tobacco, pipe tobacco, matches and lighters -- also owns El Credito Cigars, the producer of La Gloria Cubana and El Rico Habano cigars. The company is headquartered in Stockholm, and has its U.S. headquarters in Richmond, Virginia. Cullman Jr. said that Swedish Match would be doing some "cost cutting" on the administration side. General is headquartered in New York City. Richard Flaherty, CFO of Swedish Match North America, said there were "no plans in place" at the time to move General's headquarters.
Cigar Insider reached Sven Hindrikes on Wednesday for an interview about the deal. When asked if he intended changes for General, he said: "No, no, absolutely not. We would love to see this business continue well. The Cullman family has done an excellent job managing General Cigar. We would like to keep that going."
To read the full story about the sale of General, and to get full access to our database of more than 8,000 cigar ratings, subscribe to Cigar Insider.
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