Scandinavian Tobacco Group (STG) has announced that it has completed the acquisition of Royal Agio Cigars for a price of €210 million ($234.59 million).
The deal was announced in September but needed to be approved by both Agio’s work councils and regulators. When the deal was announced, the price was listed at €210 million, though due to currency changes it was $232.61 million at that time.
Royal Agio Cigars generated €133 million ($148.58 million) in revenue in 2018. Its primary business is selling machine-made and little cigars, though it also has a premium cigar division that sells cigars under the Balmoral name.
Agio is based in Duizel, the Netherlands with factories in Westerlo, Belgium; Colombo, Sri Lanka and San Pedro, Dominican Republic.
STG says that it will undergo “an integration planning period” of at least three months to determine how Agio’s workforce of 3,200 will combine with STG’s roughly 8,000 employees.
“I am very pleased that we have completed the acquisition of Royal Agio, which significantly strengthens our position in several key machine-made cigar markets in Europe and enables us to deliver an even more attractive range of cigars of the highest standards to our consumers,” said Niels Frederiksen, ceo of STG, in a press release. “The acquisition leaves Scandinavian Tobacco Group as a bigger, more competitive and more profitable company better suited to pursue growth and create value for our shareholders.”
STG owns General Cigar Co.—one of the largest U.S. cigar companies with brands like Macanudo, Cohiba and CAO—as well as retailers Cigars International and Thompson Cigar Co., and a variety of other tobacco businesses like machine-made cigars, snuff and pipe tobacco.
The company says the deal was financed by both cash on hand and debt.