Imperial Tobacco Acquires Lignum-2

Jun 11, 2008 | By Gregory Mottola
Imperial Tobacco Acquires Lignum-2

Imperial Tobacco PLC, the world's fourth largest tobacco corporation, acquired Lignum-2 Inc. for $22 million on May 21. The small, California-based company owns the Troya premium cigar and Rave cigarette brands. The deal follows Imperial's $18 billion acquisition of Altadis S.A., the world's largest cigar company, in January.

In a press release, Imperial said the Lignum-2 deal offered "further enhancement to our U.S. footprint," adding, "The acquired portfolio is complementary to ours, including Rave, a value cigarette brand positioned in the deep discount sector."

In addition to the entire Altadis cigar portfolio, which includes the U.S. trademarks for famous Cuban brands such as Montecristo, Romeo y Julieta and H. Upmann, Imperial now owns the U.S. trademark for the Troya line, which is a lesser known, smaller Cuban brand produced by Habanos S.A., Cuba's cigar exporting organization.

Cuban Troyas are primarily machine-made cigars, while Lignum-2's are handmade. The latter's regular Troya line is produced in the Dominican Republic and comes in Connecticut-shade and Cameroon varieties; the Troya X-Tra brand is a Nicaraguan puro made in Nicaragua; and the newest Troya Clasico line is also a Nicaraguan puro, crafted by Pepin Garcia in his Tabacalera Cubana S.A. factory in Nicaragua.

It has yet to be determined whether Troya will be distributed by Altadis or if Lignum-2 will retain distribution rights.