BAT Indonesia, Rothmans prepare a merger plan

JAKARTA (JP): Publicly listed cigarette maker PT British American Tobacco (BAT) Indonesia plans to merge with another cigarette maker PT Rothmans of Pall Mall Indonesia.

BAT Indonesia president Mark A. Jennings said over the weekend that the merger processes was expected to be completed in the next two or three months.

"We are in the process of integration with Rothmans of (Pall Mall) Indonesia. Rothmans Indonesia has been here for half a century and they have good brands like Dunhill and Kansas," he told journalists during a media visit to BAT's factory in Cirebon, East Java, a copy of the interview session of which was made available to The Jakarta Post.

He said the merger talks were going smoothly.

"We hope to announce it (the merger plan and processes) at a shareholders meeting in the next couple of days," he said, adding that 30 percent of BAT Indonesia's shares were owned by the public.

Rothmans of Pall Mall Indonesia, a unit of Australia's Rothmans Holding Limited, is the producer of non-clove cigarette's under renowned brands, such as Kansas, Dunhill and Pall Mall.

Rothmans of Pall Mall Indonesia was previously known as PT Faroka, a cigarette maker established in Malang, East Java, in 1932. The company changed its name to Rothmans of Pall Mall Indonesia in 1987.

Jennings declined to reveal the new composition of the merged company, saying the details of the merger should be announced to the company's shareholders first.

He also said that BAT Indonesia had no intention to acquire any local clove-blended cigarette factories.

Listed on the Jakarta Stock Exchange, BAT Indonesia is one of the country's oldest cigarette producers, commencing operations in 1917.

As of June 30 this year, the company registered unaudited total assets of Rp 671.35 billion (US$95 million), higher than the figure recorded in June 30 last year of Rp 454.85 billion.

BAT Indonesia booked an unaudited net income of Rp 59.52 billion in the first half this year, rising from a net loss of Rp 15.25 billion in the same period last year.

It remains one of the market leaders in the regular cigarette sector with brands including Lucky Strike, Kent, State Express 555, Benson & Hedges, Ardath and Commodore.

It produced a total of 15.4 billion cigarettes as of October. (cst)