JUNE 11, 2002

BAT and Gallaher

THE word on the street in the tobacco world is that British American Tobacco is about to make a takeover bid for Britain's Gallaher Group plc, the owner of Benson & Hedges and Silk Cut. This is significant in Formula 1 circles because Gallaher is currently sponsoring Jordan and BAT is funding BAR. When BAT took over Rothmans a few years ago the Williams sponsorship from Winfield (a Rothmans brand) ended.

Gallaher grew out of American Brands, which was established by the Duke Family and grew into American Tobacco. This became involved in a bitter price war with Imperial Tobacco and in the end it was agreed that a separate company called British American Tobacco would be established with James Duke running it. In 1994 American Brands (as American Tobacco had become) sold the Pall Mall and Lucky Strike brands to BAT before floating off Gallaher as an independent company in 1997. This led to the decision by Gallaher to sponsors Jordan.

If the BAT takeover does go ahead it is unlikely that Benson & Hedges will continue in F1.

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