Imperial seen as the most likely buyer of Reemtsma

IMPERIAL TOBACCO is reported to be getting ready for a $5bn bid for the Reemtsma tobacco company, the primary sponsor of the McLaren F1 team through its West cigarette brand.

Imperial, which recently overhauled Gallaher's as Britain's number one tobacco company, is believed to be competing with Japan Tobacco for the purchase. The danger is that buying the German business could leave Imperial with big debts which might not be a good idea in the current financial and political climate. The acquisition would make Imperial the world's fourth largest tobacco business behind Philip Morris, British American Tobacco and Japan Tobacco.

Imperial owns a variety of different cigarette brands including John Player and Embassy. It was the first very first tobacco company to enter F1 in the 1960s but in recent years has steered clear of the sport as the JPS brand is still linked to racing in the minds of the general public. The company has not sponsored an F1 team since it was taken over by the Hanson Trust in 1986. The company has been demerged from Hanson since 1996.

It is not clear what would happen if Reemtsma was swallowed up by Imperial but long-term contracts are believed to be in place with McLaren and so it might end up being simply a question of branding.

It is worth noting that McLaren's color scheme is not designed to be silver with sponsors coming and going to fill the spaces on the car and so a demand for the cars to be turned black and gold is unlikely to be agreed.

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