Imperial Brands PLC · LSE:IMB

Imperial Brands — Imperial Tobacco Group — Merger or Acquisition (January 2015)

15 slides from Imperial Brands's merger presentation, Jan 28, 2015

  1. Slide 1: Proposed Acquisition of US Assets

    Proposed Acquisition of US Assets General Meeting Imperial Tobacco Group PLC 28 January 2015

  2. Slide 2: Mark Williamson, Chairman

    Mark Williamson Chairman

  3. Slide 3: Acquisition Overview

    Acquisition Overview asset deal for brands and infrastructure  Acquisition of certain brands and infrastructure for $7.1bn  Brands currently owned by Reynolds: Winston, Salem, Kool  Brands currently owned by Lorillard: blu (e-cigarettes) and Maverick  Infrastructure: Lorillard’s factory, nationa

  4. Slide 4: Process Considerations

    Process Considerations constitutes a class 1 transaction  Completion subject to:  Reynolds and Lorillard merger proceeding  Imperial shareholder approval  Approval of the US regulatory authority, the Federal Trade Commission (FTC)  Imperial becoming subject to the DoJ case order  No other law

  5. Slide 5: Alison Cooper, Chief Executive

    Alison Cooper Chief Executive

  6. Slide 6: Transaction Overview

    Transaction Overview Lorillard Reynolds Imperial Commonwealth USA Gold Manufacturing Manufacturing Supply chain Supply chain Mass market cigars Sales force New Imperial Sales force US business Back office Back office 6

  7. Slide 7: The US Market

    The US Market opportunity to grow in large and profitable market  World’s largest profit pool 1( > $14bn2) - equal to c.25% of world tobacco profits  No.3 market by volume 1 (c.270bn SE)  Growing profit pool  Stable regulatory environment  Large and developing e-vapour market 1 Excludes China 2

  8. Slide 8: Transaction Rationale

    Transaction Rationale transformational for our US business Pre-transaction Post-transaction No.5 in market, c.3% share No.3 in market, c.10% share Less than 10% of group net revenues c.24% of group net revenues 1 Limited tobacco portfolio Enhanced portfolio with increased equity Not in e-cigarette m

  9. Slide 9: Brand Strategy

    Brand Strategy strengthened brand portfolio Winston, Maverick & Kool - all US top 10 brands Primary Secondary Other  Primary brands will receive a  Focus will be based on the brands  Remaining brands within the national focus with significant respective regional strengths and portfolio will be ma

  10. Slide 10: Creating a Winning Business

    Creating a Winning Business stronger offer, better execution, more influence National tobacco brands Increased consumer appeal A leading e-cigarette brand Enhanced capabilities More retail influence Key account coverage Best of both approach to integration Stronger winning business Winning culture 1

  11. Slide 11: Strengthening the Group

    Strengthening the Group  Builds on our strategy of investing in Growth Markets and Growth Brands  Establishes stronger, diversified platform for growth  US contribution to Group net revenue increases from 10% to 24%  Financially attractive deal  ROIC > 10%, materially exceeds WACC in first full

  12. Slide 12: Mark Williamson, Chairman

    Mark Williamson Chairman

  13. Slide 13: Ordinary Resolution

    Ordinary Resolution  To approve the acquisition of certain US cigarette and e-cigarette brands and assets as set out in the Notice of Meeting 13

  14. Slide 14: Proxy Votes

    Proxy Votes to approve the acquisition of US assets Proxy voting position: For 98.75% Against 0.03% Abstentions 1.22% 14

  15. Slide 15: Proposed Acquisition of US Assets

    Proposed Acquisition of US Assets Extraordinary General Meeting Imperial Tobacco Group PLC 28 January 2015

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