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The Philip Morris acquisition of the Liggett Group’s overseas cigarette interests: a comment
Philip Morris Inc. has acquired the overseas cigarette interests of the Liggett Group Inc. for a total sum of $108 million. This suit, comprises $45 million for the trademark rights (via the Philip Morris Swiss subsidiary, Fabriques de Tabacs Reunies S. A. ) and a further $63 million” for stocks and related rights, patents and know-how. The deal became effective from June 26th 1978. There are exceptions within the deal, which does not include the overseas leaf tobacco business of Liggett & Myers do Brasil Ltda., or the smoking and chewing tobacco business of Pinkerton Tobacco Co. Of more relevance to us is the exclusion of Liggett’s Argentine business, retained by Liggett Group Inc. In Argentina L&M cigarettes are manufactured under license by our own associates, Nozleza Piccardo. Although Liggett retain ownership, they have appointed Philip Morris as their agent to perform the Liggett Group’s obligations. No change in the Argentine licensing arrangement is foreseen. Other exceptions occur in Canada and Hong Kong. In Canada the Chesterfield rights are owned by our associates, IMASCO. In Hong Kong the Liggett & Myers easiness is owned by our associates; a situation dating back to the days when BAT was operative in China, and which still applies (technically if not in practice) to China, Vietnam, Cambodia and Laos. Liggett licensing arrangements are in operation in a number of markets, and involve various manufacturers. In Finland, for example, our own associates Sdomen Tupakka Cy manufacture and market L&M. In South Africa, Germany and Benelux the Liggett brands are manufactured and marketed through Rothmans associates. Over past years Liggett & Myers have had links with various international tobacco manufacturers, and the legacy of this is likely to create a number of “reshuffling” problems during the next few years. In 1974 Rembrandt (Rothmans) bought an 8. 5% stake in the Liggett Group, thus gaining an effective interest in the company. From this stemmed a series of licensing agreements regarding Chesterfield. Dr. Rupert’s influence is also believed to have been evident in.