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Imperial Completes $1.44 Billion Sale Of Premium Cigar Business

The deal includes half of Cuba’s Habanos S.A., Tabacalera USA, Casa de Montecristo, JR Cigar, the world’s largest cigar factory and some of the world’s most famous cigar brands, including Montecristo and Romeo y Julieta
Oct 29, 2020 | By David Savona
Imperial Completes $1.44 Billion Sale Of Premium Cigar Business

Some of the premium cigar industry’s most prized assets officially have new owners. Today, Imperial Brands PLC completed the sale of its premium cigar business to an investment consortium for 1.225 billion euros ($1.44 billion). The sale includes a vast array of cigar brands, factories and companies: 50 percent of Cuba’s Habanos S.A.; Tabacalera USA, the company that makes and markets such non-Cuban cigar brands as Montecristo, Romeo y Julieta and H. Upmann; a pair of cigar factories, including one that’s considered the world’s largest; and JR Cigars, one of the world’s biggest cigar retail chains. It’s one of the biggest sales the cigar industry has ever seen.

It’s also complex, and was split into two transactions. The U.S. division was acquired by a company named Gemstone Investment Holding Ltd., which bought Tabacalera USA, its assets Altadis USA, which is responsible for the distribution of premium cigars in the United States, online retailers JR Cigar, Serious Cigars and Cigars.com, plus the Casa de Montecristo retail chain.

A company named Allied Cigar Corporation S.L. acquired the remaining premium cigar assets of Imperial, which includes half of Cuba’s Habanos S.A., the company that exports all of Cuba’s cigars.

Both companies involved in the purchase consist of the same consortium of investors, and the acquiring companies were incorporated in Hong Kong in March. They have remained anonymous in this process, and were not involved in the tobacco business prior to this deal.

Little is expected to change with the companies, despite the new owners.

The longtime CEO of Tabacalera, Fernando Domínguez, told Cigar Aficionado earlier to expect a continuation of what had gone on before. “The organization is going to stay the same, both with me in charge worldwide, and our same teams in the United States, Cuba and around the world.”

Javier Estades, the president and CEO of Tabaclaera USA, told Cigar Aficionado: “We are excited to start this new journey which will bring even more resources to build the finest premium experience for the U.S. adult consumer.”

The acquisition has gone on for quite some time. The companies reached an agreement to sell half a year ago, on April 27, and they originally hoped to finish the sale by July. But---like so many things in 2020—it has been delayed several times by the pandemic.

The purchase price will not be paid all at once. The investors are deferring some of the payments to a later date, including a 69 million euro payment ($80.8 million) when Imperial makes the formal transfer of Tabacalera de Garcia Ltd. to the new owners. The transfer of that cigar factory—which at this point in time also makes machine-made cigars for Imperial—is expected in 2021.

This deal ends Imperial’s time in the premium cigar business, but it will continue to own a large machine-made cigar business, selling mass-market smokes.

Gordon Mott also contributed reporting to this story.

H. Upmann (Non-Cuban) Montecristo (Non-Cuban) Romeo y Julieta (Non-Cuban) Altadis U.S.A. Inc. Habanos S.A.

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