Tabacalera, Seita seek tobacco merger
Cigarette company Seita, maker of France's Gitane and Gauloise brands, and Spain's Tabacalera said on Monday they were discussing an alliance that could form the world's fourth biggest tobacco group.
A source close to the deal said Seita and Tabacalera aimed to try to finalise terms for a full merger on Monday evening or on Tuesday.
Analysts said a merged group, with a combined market capitalisation of 6.7 billion euros ($7.2 billion), made sense given rapid consolidation in the shrinking world tobacco market.
Speculation about a possible tie-up has swirled repeatedly since the two firms forged a joint venture called Global Tobacco in 1998 to reinforce their international interests.
The two were also alleged to have joined forces in a failed bid for RJR Nabisco's (NYSE:RN - news) non-U.S. tobacco business which it sold to Japan Tobacco in March.