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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported)
MARCH 26, 1999
GENERAL CIGAR HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
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Commission file number: (1-12757)
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Delaware 13-3922128
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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387 Park Avenue South 10016-8899
New York, New York (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (212) 448-3800
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GENERAL CIGAR HOLDINGS, INC.
Item 5. Other Events
The Registrant announced on March 26, 1999 that it has entered into a
definitive Asset Purchase Agreement which could lead to the sale of its
mass-market cigar business to Swedish Match AB for $200 million in cash. See
the Press Release filed herewith as Exhibit No. 99.
Item 7. Financial Statements and Exhibits
(a)(1) N/A
(b) N/A
(c) Exhibits:
No. Description
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99 Press Release, dated March 26, 1999
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GENERAL CIGAR HOLDINGS, INC.
SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
GENERAL CIGAR HOLDINGS, INC.
Date: April 2, 1999 By: /s/ Joseph Aird
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Joseph Aird
Senior Vice President,
Chief Financial Officer,
Treasurer and Acting Controller
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GENERAL CIGAR HOLDINGS, INC.
INDEX TO EXHIBIT
EXHIBIT NO. DESCRIPTION
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99 Press Release, dated March 26, 1999
EXHIBIT 99
NEWS FROM:
GENERAL CIGAR HOLDINGS, INC.
387 Park avenue South CONTACT:
New York, NY 10016-8899 JOSEPH AIRD
212/448-3800 (860)243-4691
GENERAL CIGAR SELLS MASS MARKET BUSINESS,
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TO CONCENTRATE ON ITS PREMIUM BRANDS
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NEW YORK--(BUSINESS WIRE)--March 26, 1999--General Cigar Holdings, Inc.
(NYSE:MPP - news) and Swedish Match AB (NASDAQ:SWMAY - news) announced today
that they have entered into a definitive Asset Purchase Agreement for the sale
of General Cigar's mass-market cigar business to Swedish Match for $200 million
in cash. The mass-market cigar business includes two manufacturing facilities,
Dothan, Alabama, USA and Santiago, Dominican Republic; machinery and equipment;
inventories, trademarks; and other commercial assets and liabilities. In
addition, as part of the sale, General Cigar and Swedish Match have entered into
an ongoing strategic relationship through a Tobacco Supply Agreement and a
Master Distribution Agreement. Among the mass-market brands being sold are
Garcia y Vega (the number one selling mass-market cigar using a natural leaf
wrapper), White Owl, Tiparillo and Tijuana Smalls.
The terms of the Tobacco Supply Agreement call for General Cigar to supply
Swedish Match's tobacco needs for the acquired business. The Master Distribution
Agreement provides for Swedish Match's sales force in the U.S. to sell a select
number of General Cigar's premium cigar brands that are currently sold through
mass-market distribution channels.
Commenting on the transaction, Edgar M. Cullman, Jr., General Cigar's Chief
Executive Officer said, "This transaction allows us to focus our efforts on the
branded premium cigar business, the largest portion of our business, where we
can add the greatest strategic value because of our heritage and expertise."
"The addition of the General Cigar mass-market business to our existing U.S.
operations will complement our operations in the U.S. perfectly and will help to
ensure that we can defend our leadership position for our entire product range
in the U.S.", said Lennart Sunden, Swedish Match's CEO and President. "This
strengthening of sales and distribution channels will provide a growth platform
for our key strategic products such as snuff." Mr. Sunden added "The transaction
will have a positive effect on net earnings and on net cash flow for Swedish
Match".
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General Cigar expects to use the net proceeds from the sale to reduce
outstanding debt, to make selective acquisitions of premium cigar brands, for
general corporate purposes and to take advantage of opportunities that may arise
in the international cigar market place.
Swedish Match is an international group with headquarters in Stockholm, Sweden.
The company manufactures a broad range of tobacco products, matches and
disposable lighters which are sold in approximately 140 countries. Swedish Match
is one of the world's largest cigar manufacturers with a turnover in the cigar
operations of 900 MSEK. Annual sales in 1998 amounted to approximately 8,200
MSEK. Swedish Match is listed on the Stockholm Stock Exchange and on NASDAQ.
The transaction is subject to regulatory review and other customary closing
conditions and is expected to close in late April. Peter J. Solomon Company
represented General Cigar in connection with the transaction.
General Cigar Holdings, which traces it roots to 1906, is a leading manufacturer
and marketer of premium cigar brands including Macanudo, Partagas, Punch (MPP)
and Hoyo de Monterrey, as well as mass market cigars including Garcia y Vega,
White Owl and Tiparillos. In addition to being a major grower of high-quality
Connecticut shade wrapper tobacco, General Cigar owns and operates the Club
Macanudo cigar bars in New York City and Chicago.
FORWARD LOOKING STATEMENTS: Certain matters discussed within this press
release may constitute forward-looking statements within the meaning of the
federal securities laws. Such statements include, without limitation,
General Cigar's beliefs about trends in the cigar industry and its views
about the long-term future of the industry and General Cigar. The following
factors, among others, could cause General Cigar's financial performance to
differ materially from that expressed in such statements: (i) changes in
consumer preferences resulting in a decline in the demand for and
consumption of cigars; (ii) an increase in the price of raw materials, (iii)
additional governmental regulation of tobacco or tobacco litigation, (iv)
enactment of new or significant increases in state or federal existing
excise taxes or (v) political and/or economic instability in its foreign
operations, (vi) failure to remediate Year 2000 issues and (vii) other risks
and uncertainties set forth in General Cigar's other filings with the
Securities and Exchange Commission. We refer you to the documents General
Cigar's files from time to time with the Securities and Exchange Commission.
