Russian management buys BAT’s tobacco business in Russia

On September 7, British American Tobacco (BAT) announced that it has entered into a deal to sell its Russian and Belarusian businesses. The sale will be to a consortium led by members of BAT Russia’s management team. This move follows BAT’s decision in March 2022 to exit Russia due to the sanctions imposed by the United States, European Union, and other countries following Russia’s invasion of Ukraine.

At the time of the decision, BAT controlled nearly 25% of the Russian tobacco market. BAT had been in talks with its local distributor regarding the sale, but it has now formally entered into an agreement with the consortium led by its local management team. The sale is in compliance with both local and international laws.

Once the sale is completed, BAT will no longer have a presence in Russia or Belarus and will not receive any financial gain from ongoing sales in these markets. The company expects the transaction to be completed within the next month.

Despite the sale, BAT remains confident in delivering its full-year guidance. In July 2022, the company took a £957 million impairment related to the transfer of its Russian business.

As part of the agreement, the employment terms of BAT’s staff in Russia and Belarus will remain comparable for at least two years following the completion of the deal.