British American Tobacco (NYSE:BTI) (BAT (LON:BATS)) has confirmed its exit from the Russian and Belarusian markets, signing an agreement on Thursday to sell its businesses in these regions to a consortium led by local management. The announcement follows BAT's declaration last year that maintaining its operations in Russia had become unsustainable due to the country's unprovoked invasion of Ukraine.
The tobacco giant, owner of brands such as Lucky Strike and Dunhill, has not disclosed financial details of the transaction. However, it has maintained its full-year guidance, expressing confidence in meeting expectations post-sale. BAT's operations in these two countries accounted for approximately 2.7% of group revenue and around 2.5% of group adjusted profit from operations as of June 30.
On completion of the deal, expected within the next month subject to certain conditions, the businesses will be renamed ITMS Group. "Upon completion, BAT will no longer have a presence in Russia or Belarus and will receive no financial gain from ongoing sales in these markets," the company stated.
The transfer process has focused on preserving the interests of BAT's colleagues in Russia and Belarus. As part of the agreement, their employment terms will remain comparable to their existing BAT terms for at least two years post-completion.
In its half-year results reported in July, BAT noted a 4.4% increase in revenue (+2.6% at constant currency rates), attributing this growth to a solid performance from its 'New Categories' business, which saw revenue up by 26.6%.
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