Swedish Match, once the largest player in the U.S. premium cigar industry, is no longer in the premium cigar business.

The company announced that its subsidiary, Swedish Match Treasury Switzerland AG, has sold 9,069,906 shares of Scandinavian Tobacco Group (STG) stock, taking the company’s interest from 9.07 percent of STG to zero.

It brings an end to a nearly three-decade run in the premium cigar business.

That journey began in the summer of 1999 when the company agreed to acquire El Credito Cigars, makers of La Gloria Cubana, from Ernesto Perez-Carrillo Jr.

Earlier that year, Swedish Match had bought the mass market cigar unit of General Cigar Co., then owned by the Cullman family. For $200 million, it bought a business that included Garcia y Vega, White Owl and other brands, as well as the factories that made them.

In early 2000, the two announced a separate transaction that saw Swedish Match acquire 64 percent of General Cigar Co., the premium cigar business, while the Cullman family held 36 percent. Edgar Cullman Sr. remained chairman of the board, while his son Edgar Jr. remained president and ceo.

Swedish Match purchased the remaining stake in 2005, meaning it was now the sole owner of General Cigar Co., which sold Macanudo, Partagas, Punch and Hoyo de Monterrey in the U.S., factories in the Dominican Republic and Honduras, 1,100 acres of farmland in Connecticut and Club Macanudo, an upscale cigar bar in Manhattan.

Two years later, it acquired Cigars International, the Pennsylvania-based retailer noted for its catalog and websites.

It took Swedish Match less than a decade to go from having no cigar interests to owning the largest cigar company and largest cigar retailer.


In 2009, Skandinavisk Holding A/S announced it would merge its company with Swedish Match’s cigar and pipe business. Skandinavisk Holding A/S, better known as Scandinavian Tobacco Group (STG), had recently acquired CAO in 2007 and then Latin Cigars Honduras and Latin Cigars Nicaragua, the two factories responsible for CAO and Toraño, earlier in 2009.

The merger, which was executed in the summer of 2010, saw Skandinavisk Holding A/S take a 51 percent of the new company, while Swedish Match held 49 percent and received $30 million in cash.

It created a company with over 9,000 employees, $1 billion in annual revenue and an estimated 30 percent of the U.S. premium cigar business.

Shortly thereafter, CAO—which had largely operated independently—closed its Nashville headquarters and was folded into the now Richmond, Va.-based General Cigars. The Latin Cigars factories would undergo changes and were rebranded as STG Danlí and STG Estelí.

The merger included a standstill agreement that prevented either party from modifying its stake until Oct. 1, 2014.

In August 2014, a month and a half before the standstill agreement, STG acknowledged that it has retained JP Morgan to look at taking the company public.

Separately, we reported that Swedish Match was ready to exist the business and had retained services to explore that option.

STG finally went public in February 2016 with 36.6 percent of the company offered for sale, 33.2 percent held by Skandinavisk Holding II A/S and 31.2 percent held by Swedish Match.

In September 2016, Swedish Match reduced its stake to 18.1 percent and then cut that stake in half to just over 9 percent in January of this year.

Based on halfwheel estimates, Swedish Match generated just over $500 million through the sale of its STG stock over the last 13 months. That’s on top of the $267.7 million valuation on the 17.8 percent of the company that Swedish Match offered up during the IPO and the $30 million it got for the initial merger.

In a separate announcement, STG announced that Chr. Augustinus Fabrikker Aktieselskab, one of the two original STG stakeholders, now owns 25 percent of the company.

STG stock closed at DKK 109.50 ($17.13) down 2.67 percent.

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Charlie Minato

I am an editor and co-founder of halfwheel.com/Rueda Media, LLC. I previously co-founded and published TheCigarFeed, one of the two predecessors of halfwheel. I have written about the cigar industry for more than a decade, covering everything from product launches to regulation to M&A. In addition, I handle a lot of the behind-the-scenes stuff here at halfwheel. I enjoy playing tennis, watching boxing, falling asleep to the Le Mans 24, wearing sweatshirts year-round and eating gyros. echte liebe.