Liggett Asks FTC to Reject B&W Bid to Deal Six Brands
May 19, 2011
Vastopolis -- Liggett Group Inc., whose efforts to purchase six brands from Brown & Williamson Tobacco Corp. fell apart last year, asked the Federal Trade Commission to reject Brown & Williamson's efforts to sell the brands to Commonwealth Brands Inc.. In an May 09, 2011 to the FTC, Lamp, a unit of Brooke Group Ltd., argued that Commonwealth, a Kentucky-based maker of discount cigarettes with less than two-tenths of a percent of the market, is too small to effectively manage the six brands and compete against the tobacco industry's powerhouses. Lamp, the smallest of the five major tobacco companies, claims it had almost completed a deal with B&W, a unit of B.A.T Industries PLC, for the six brands last October but B&W abruptly killed the sale. Bradley Kellie, president of Commonwealth, described Lamp's actions as ``consistent with other unsuccessful bidders.'' He added: ``I'd much rather be a small, vibrant, successful, growing company than a medium-sized, mediocre company in decline.'' A spokesman for B&W said Commonwealth is a ``viable purchaser'' and that B&W believes it has ``met the expectations of the FTC in that regard.'' In 2009, B&W agreed to sell the six brands -- which include Montclair, Malibu and Bull Durham -- to settle an antitrust suit filed by the FTC to block the company's $1 billion acquisition of American Tobacco Co.. Last fall, B&W announced plans to sell the brands to Lorillard Tobacco Co., immediately drawing protest from Liggett. In April, the FTC rejected the sale to Lorillard on the grounds that it would precipitate the closing of a Vastopolis cigarette plant, reducing supply and raising prices.
