STG Announces Agreement to Acquire Mac Baren Tobacco Co.

Scandinavian Tobacco Group (STG) has announced an agreement to acquire Mac Baren Tobacco Co. A/S, a renowned pipe tobacco manufacturer, from Halberg A/S.

The deal is valued at DKK 535 million ($76.84 million). According to STG, Mac Baren’s annual revenues up to April 2024 were DKK 723 million ($103.84 million) with an EBITDA of DKK 85 million ($12.21 million). Mac Baren’s pipe tobacco products include its own Mac Baren brand, as well as Amphora and Holger Danske. Additionally, it offers cut tobacco brands like Amsterdamer, Choice, and Opal, along with nicotine pouches. The company, founded in 1826, has a long-standing heritage in the tobacco industry.

Mac Baren’s involvement in the cigar industry is through its U.S. subsidiary, Sutliff Tobacco Co., which operates a distribution company serving approximately a dozen independent brands from its warehouse in Richmond, Virginia. Sutliff handles storage, order fulfilment, and other logistics for these brands. The future of this service under STG’s ownership remains unclear, as STG is not typically known for offering these services to other cigar brands.

STG’s diverse cigar portfolio includes retailers like Cigars International, Cigar.com, Cigarbid.com, Thompson Cigar, PipesandCigars.com, and Cigora. It also owns General Cigar Co. and Forged Cigar Co., which market brands such as Cohiba, La Gloria Cubana, and Partagas in the U.S. Additionally, STG sells Agio, Alec Bradley, CAO, Macanudo, Room101, and Toraño in both U.S. and international markets.

Niels Frederiksen, CEO of STG, expressed his satisfaction with the acquisition, stating, “I am very pleased that we have taken this important step to strengthen our smoking tobacco business with the acquisition of Mac Baren. This acquisition will enhance our position in the global pipe tobacco market and expand our range of high-standard brands for our consumers. We anticipate meaningful synergies and good value for our shareholders once the integration is complete.”

No closing date has been announced yet, but STG plans to integrate the businesses within 120 days post-closing. Mac Baren employs approximately 200 people and has production facilities in Svendborg, Denmark, and Richmond, Virginia.

In the last few years, STG acquired nicotine pouch company XQS, premium cigar brands Alec Bradley and Room101, the Italian cigar manufacturer Moderno Opificio del Sigaro Italiano, Royal Agio Cigars (both the machine made operations and the premium cigar brand Balmoral), Peterson Pipe Group and the big online cigar retailer Thompson, none of which perform better than before the purchase.