Rule 8.3 - GALLAHER GROUP

FORM 8.3

    DEALINGS BY PERSONS WITH INTERESTS IN SECURITIES REPRESENTING 1% OR MORE
              (Rule 8.3 of the City Code on Takeovers and Mergers)


1.   KEY INFORMATION

Name of person dealing        BARCLAYS PLC
(Note 1)
Company dealt in              GALLAHER GROUP
Class of relevant security    ORD GBP0.10
to which the dealings being
disclosed relate (Note 2)
Date of dealing               15 December 2006

2.   INTERESTS, SHORT POSITIONS AND RIGHTS TO SUBSCRIBE

(a)  Interests and short positions (following dealing) in the class of relevant
security dealt in (Note 3)

                            Long                     Short

                      Number       (%)         Number       (%)

(1) Relevant       36,896,158     5.62%     1,173,730      0.18%
securities
(2) Derivatives       917,780     0.14%       569,868      0.09%
(other than
options)
(3) Options and             0     0.00%             0      0.00%
agreements to
purchase/sell
Total              37,814,938     5.76%     1,743,598      0.27%




(b)  Interests and short positions in relevant securities of the company, other
     than the class dealt in (Note 3)

Class of                    Long                     Short
relevant
security:

                  Number              (%)   Number              (%)

(1) Relevant
securities

(2) Derivatives
(other than
options)

(3) Options and
agreements to
purchase/sell

Total


  (c)  Rights to subscribe (Note 3)

Class of relevant security:   Details



3.   DEALINGS (Note 4)

  (a)  Purchases and sales

Purchase/sale Number of Securities Price per unit
                                   (GBP)
Purchase      2,324                11.5850
Purchase      4,567                11.5850
Purchase      866                  11.5750
Purchase      4,122                11.5850
Purchase      100,000              11.5165
Purchase      375                  11.5850
Purchase      10,235               11.5650
Purchase      29,345               Transfer
Purchase      133,00               11.5000
Purchase      9,904                Transfer
Purchase      146,100              11.5502
Purchase      3,136                11.5850
Purchase      204,097              11.5359
Purchase      200,000              11.5065
Purchase      2,364                Transfer
Sale          16,443               11.5816
Sale          43,200               11.5264
Sale          166                  11.5850
Sale          62,987               11.5013
Sale          3,136                11.5850
Sale          31,898               11.5013
Sale          4,700                11.5060
Sale          100,000              11.5584
Sale          2,863                11.5850
Sale          75,000               11.5584
Sale          3,034                11.5850
Sale          2,324                11.5850
Sale          1,981                11.5033
Sale          133,000              11.5000
Sale          47,944               11.5452
Sale          16,119               11.5420
Sale          79,899               11.5013
Sale          11,730               11.5827
Sale          1,300                11.4859
Sale          1,515                11.5127
Sale          45,000               11.5201
Sale          6,045                11.5050
Sale          29,345               Transfer
Sale          380,000              11.5000
Sale          1,533                11.5850
Sale          24,473               11.5013

(b)  Derivatives transactions (other than options)

Product name,  Long/Short    Number of     Price per
(e.g. CFD)     (Note 6)      Securities    unit (GBP)
CFD            Short         204097        11.5358
CFD            Short         146100        11.5501
CFD            Long          1981          11.5033
CFD            Long          1515          11.5126
CFD            Long          43200         11.5263
CFD            Long          47944         11.5451
CFD            Long          11730         11.5826
CFD            Long          47338         11.5961


(c)  Options transactions in respect of existing securities

(i)  Writing, selling, purchasing or varying

Product name,   Writing,          Number of          Exercise  Type, e.g.      Expiry   Option money
e.g. call       selling,          securities to      price     American,       date     paid/received
option          purchasing,       which the option             European etc.            per unit (GBP)
                varying etc.      relates (GBP)


(ii) Exercising

Product name, e.g.  Number of           Exercise price per
call option         securities          unit (Note 5)




(d)  Other dealings (including new securities) (Note 4)


Nature of transaction Details           Price per unit
(Note 8)                                (if applicable)
                                        (Note 5)





4.   OTHER INFORMATION

Agreements, arrangements or understandings relating to options or derivatives


Full details of any agreement, arrangement or understanding between the
person disclosing and any other person relating to the voting rights of
any relevant securities under any option referred to on this form or
relating to the voting rights or future acquisition or disposal of any
relevant securities to which any derivative referred to on this form is
referenced.  If none, this should be stated.





Is a Supplemental Form 8 attached? (Note 9)                 NO


Date of disclosure                         18 December 2006
Contact name                               BARCLAYS COMPLIANCE
Telephone number                           020 7116 2913
If a connected EFM, name of
offeree/offeror with which connected
If a connected EFM, state nature of
connection (Note 10)


Notes

The Notes on Form 8.3 can be viewed on the Takeover Panel's website at
www.thetakeoverpanel.org.uk