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British American Tobacco    

(BAT, BATCo & BATUS)

British American Tobacco (BAT) had many division, subdivisions, departments and subsidiaries, mostly in tobacco, but also in everything from paper manufacture to health insurance. BATUS, for instance, is the US holding company for the company's operations outside tobacco, while Brown & Williamson runs the cigarette business.

SUMMARY ONLY

History


BAT was create in 1902 as part of a peace pact that settled a fierce price and territory war between US tobacco baron J 'Buck' Duke and the English cigarette manufacturers. Duke had invaded Britain by buying a Liverpool cigarette company.

The British family-owned cigarette companies had been forced to join forces to defend themselves , and in the process they formed Imperial Tobacco Co. (of Great Britain & Ireland), Ltd. To end trans-Atlantic hostilities they did a deal where Duke agreed that his American Tobacco Co. would stay out of Britain if Imperial would stay out of the USA, and they would share the carving up of the rest of the globe. BAT was set up to take over the business of both companies in other parts of the world.

The two companies then assigned to each other the rights to their brands in each others's home markets, receiving BAT shares in exchange. Outside Britain, Ireland and the USA, this made BAT the owner of the trade marks, trade names and brands of both Imperial and American Tobacco.

1911: US Supreme Court trust action severs BAT and American Tobacco's ties. This meant that BAT could now operate in the USA

1927: BAT bought Brown & Williamson, a small company making mostly pipe and chewing tobacco.

1930: B&W introduced the 10¢ economy pack of Wings in the Depression.

By 1961

This year marked the end of the old 'colonial era'. Under threat from health activists, BAT was forced to conduct some Smoking and Health research into their products. It also had to modernise its operations and begin focussing on management and investment.
  • They established a laboratory and hired Dr James Green as a director of research.
  • Devolved decisions more to the local management,
  • Tide of nationalism forced them to begin selling some stock to investors in the countries where it operated.

They also became a holding company, allowing regional companies more independence.

By 1966

  • BAT is the world's largest tobacco company with sales of $1 billion,
  • Imperial still holds a 28% stake,
  • BAT had manufacturing and processing operations strung out around the world in 140 plants.
  • Headquarters were at No 7 Millbank, on the banks of the Thames.
  • Brown & Williamson Tobacco Corp, was now the third largest US tobacco company. (Lucky Strike, Kool, Raleigh, Belair, Viceroy). It was providing one-third of BAT's income.
  • B&W is an arms-length subsidiary. BAT does not put its own people into B&W, but it does provide training at BAT's own management school. Also they cooperate on research programs.
  • BAT (Deuschland) has a quarter of the German market. It also owns Sunmen Tupakka OY in Finland.
  • It made 1 in every 5 cigarettes smoked in the "free world." It markets 400 brands of cigarettes, several hundred brands of cigars and pipe tobacco in 150 countries.
  • Export deals - It makes "Players" in England for export only (This is an Imperial brand in the UK); B&W in Petersburg, Va makes Luckies and Pall Mall for export only (American tobacco brands in the US)
  • British deals. It makes, but doesn't sell, the cigarettes sold in Britain by Gallaher Ltd, which is the second-largest local tobacco company (after Imperial)

Non-tobacco.
Majority share in Lentherie, Ltd, a cosmetics maker
One third of Wiggins, Teape & Co, British paper maker

BATCo. was formerly the indirect parent of Brown & Williamson and BATUS Holdings, Inc.

By 1990

BATUS Holdings Inc. was:
  • a Delaware corporation with its principal place of business in Louisville, Kentucky
  • an indirect subsidiary of BAT
  • an indirect corporate parent of Brown & Williamson. [BAT is the ultimate shareholder and parent of Brown & Williamson.]

BATUS Inc, is Brown & Williamson's immediate parent company in Louisville Kentucky.