Rothmans, Wills Near Deal With Australian Regulator - Report

[Robert Weissman <rob@essential.org>]

Rothmans, Wills Near Deal With Australian Regulator - Report

by Dow Jones Newswires

AUSTRALIA;
Date: Thursday, 5/13/99

SYDNEY -- WD & HO Wills Holdings Ltd. (A.WLS) and Rothmans Holdings Ltd.
(A.RTH) are close to striking a deal with the Australian Competition &
Consumer Commission that will allow the two Australian tobacco companies
to merge, according to a newspaper report Friday. 

The Sydney Morning Herald, a daily metropolitan newspaper, said that as
part of the deal with the anti-trust body, the companies will sell certain
brands to an overseas-based competitor. An initial merger proposal was
rejected by the ACCC in March, on the grounds that it would substantially
lessen competition in the Australian cigarette market. 

The merger of WD & HO Wills and Rothmans Holdings is part of a proposed
global marriage involving British American Tobacco PLC (BTI) and Rothmans
International BV (N.RMI). 

The newspaper quoted an unnamed adviser to BAT as saying: "The commission
has accepted (the deal) as a very good solution in the sense of who the
buyer is and what the outcome will be. It's a buyer accepted by the
commission as a very credible buyer." 

Officials from Wills and Rothmans Holdings said they were unable to
comment on the article while a spokesman for the ACCC wasn't immediately
available. 

WD & HO Wills is 67% owned by British American Tobacco. Rothmans Holdings
is 50% held by Rothmans International BV (N.RMI), in turn owned by
Switzerland's Compagnie Financiere Richemont (Z.CFR) and South
Africa-based Rembrandt Group (O.RGR). 

A spokesman for BAT in Australia later said it wasn't clear how long the
ACCC would take to make a ruling. "We are still in discussions with the
ACCC and nothing has been resolved," he told Dow Jones Newswires. 

URL for this Article:
http://interactive.wsj.com/archive/retrieve.cgi?id=DI-CO-19990513-006524.djml