Imperial Brands sells cigar business for EUR1.23B

Imperial Brands PLC said Monday that it has agreed to sell its worldwide premium cigar business for 1.225 billion euros ($1.325 billion) and will use the money to reduce debt.

The tobacco company--which houses Winston cigarettes, rolling tobacco Golden Virginia and rolling paper Rizla among its brands--said that Allied Cigar Corporation, S.L has agreed to pay EUR1.04 billion for Premium Cigar RoW; whereas Gemstone Investment Holding Ltd. would pay EUR185 million for Premium Cigar USA.

The transactions are expected to close in the third quarter of the year and are subject to regulatory clearances, the company said.

"This disposal reinforces our strategic ambition of becoming a leaner and more agile organization and the proceeds will realize value for shareholders by reducing debt as part of our ongoing focus on active capital management", Joint Interim Chief Executives Dominic Brisby and Joerg Biebernick said.

Shares at 0920 GMT were up 43.5 pence, or 2.8%, at 1,590 pence.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

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