NOVEMBER 24, 2000

Gauloises looking to buy...

GAULOISES may be out of Formula 1 at the moment following its split with Prost Grand Prix, but its parent company, the Franco-Spanish tobacco group Altadis says that it is looking to expand its operations in Europe and has the money to buy up smaller companies to make them more competitive with global giants Philip Morris, British American Tobacco and Japan Tobacco.

GAULOISES may be out of Formula 1 at the moment following its split with Prost Grand Prix, but its parent company, the Franco-Spanish tobacco group Altadis says that it is looking to expand its operations in Europe and has the money to buy up smaller companies to make them more competitive with global giants Philip Morris, British American Tobacco and Japan Tobacco.

There are four companies which are believed to have been targeted by Altadis for possible takeover. These are believed to include Austria Tabak, Britain's Gallaher and Germany's Reemtsma. This could become significant as Gallaher is the owner of the Benson & Hedges brand and Reemtsma provides the funding for McLaren, from its West tobacco subsidiary. A takeover of either company by Altadis could have a dramatic effect on those sponsorships.

Although there are plans in various countries to stop tobacco sponsorship, the plans for a European ban have been blocked although the FIA has said that it will introduce a ban of its own in motor racing if the planned World Health Organisation treaty goes ahead. This may take years and so the tobacco companies are still looking at ways to exploit the existing rules - and Formula 1 provides them with a very good showcase.