Reuters

Franco-Spanish tobacco group Altadis will look at several potential opportunities to buy state tobacco monopolies that are coming up for sale, its co-chairman said in Monday's L'Agefi newspaper.

Acquisition-hungry Altadis, which earlier this month lost out in bidding for Germany's Reemtsma to Imperial Tobacco IMT.L , is also watching out for opportunities in Russia, Jean-Dominique Comolli was quoted as saying.

Last week Altadis Co-Chairman Pablo Isla told a Madrid newspaper that his company could spend around 3.1 billion euros ($2.7 billion) on acquisitions, and was interested in the privatisation of Italy's Ene Tabacchi Italiani and Morocco's state tobacco firm.

In addition to these, there were also privatizations coming up in Bulgaria, Turkey and South Korea, Comolli told L'Agefi.

"These are therefore the possibilities we will look at...we are also very interested in Russia, the main European market, where there are still opportunities," the newspaper quoted him as saying.

He also said Altadis, the result of the merger of Spain's Tabacaleria and France's Seita in 1999, had achieved synergies of nearly 50 million euros from the merger during 2001, two-thirds of its target of reaching 70 million to 100 million euros of synergies in 2003.

Commenting on rule changes that affect his industry, Comolli said that European tax harmonisation would help Altadis because it would necessitate price rises.

If the United States lifted its embargo on Cuban cigars, Altadis would expect price rises for such cigars in a market starved of this tobacco delicacy for over 40 years, but even so cigars of other origins should not suffer, he said.

"All cigar makers of all types of cigar would probably benefit from a new cigar boom," he said.
Cigars' profitability, currently at 21 percent, should catch up with cigarette profit margins (ratio of EBITDA to sales), which stand at 32 percent, he said.

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