Belgrade, Sept 3, 2003 - British American Tobacco (BAT), the world's third largest tobacco company, signed a €87 million sell-off agreement on Wednesday to take a majority stake in Serbian tobacco company Duvanska Industrija Vranje (DIV).
The agreement was signed by Serbian Privatisation Agency Director Mirko Cvetkovic and BAT Regional Director for Europe Georg Domizlaff. Serbian Prime Minister Zoran Zivkovic, Minister of Economy and Privatisation Aleksandar Vlahovic, Minister of Finance and Economy Bozidar Djelic and DIV Director Mile Stevanovic also attended the signing ceremony.
The arrival of BAT on the Serbian market confirms the success Serbia's reform, Prime Minister Zivkovic told a press conference, adding that the government will remain committed to its reforms.
Vlahovic and Djelic said that Serbia has managed to improve its image abroad by selling tobacco companies in Nis and Vranje. The ministers added that the two sell-off deals with the world's strongest tobacco companies will positively affect not only Serbia's foreign trade and balance of payment, but also the arrival of other companies.
BAT Regional Director for Europe Georg Domizlaff said that the company has been impressed with the courage and speed of the Serbian government's economic reforms and has estimating that the time is right for investing in Serbia.
Domizlaff said he believes that the combination of DIV's skill and BAT's experience will result in a win-win partnership which will secure profit for all shareholders, boost Serbia's state coffers, raise workers' wages, and also allow BAT to compete in the Serbian cigarette market.
Under the sell-off agreement, BAT has pledged €87 million, 50 million of which for a 67.81 percent stake in DIV, €24 million in investments over the next five years and a social welfare programme of €13.14 million. Budget revenues to be raised from the transaction amount to €50 million and will be used for the construction and repair of roads and irrigation systems. Part of the revenues will be allocated for the Development Fund for supporting small and medium-sized enterprises.
