Acquisition

British American Tobacco PLC
04 August 2003


                     British American Tobacco wins bid for

                            Serbian tobacco company


British American Tobacco was today confirmed by the Serbian Government as the
winning bidder for a 67.8% holding in the Serbian tobacco company Duvanska
Industrija Vranje (DIV) for €50 million.

In addition, the Group has committed to invest €24 million in factory
modernisation over two years and further amounts over five years on social
programmes.

In 2002 DIV manufactured and sold approximately 1.6 billion cigarettes - about
8% of the total Serbian market. It employs around 570 people and is based in
Vranje in southern Serbia.

British American Tobacco's imported international brands already account for
approximately 13% of the market, including Lucky Strike which is Serbia's
top-selling international brand. The acquisition will allow Serbian manufacture
of the brands, freeing them from import duties.  In the longer term, export
opportunities are planned as neighbouring countries in south east Europe develop
free trade agreements.

Following completion of the transaction DIV employees will hold approximately
17.6% of the issued share capital. The remaining 14.6% stake will be retained by
the Government.

The transaction, which is subject to both parties agreeing and signing a sale
and purchase agreement, is expected to be completed by September this year.


Contacts

British American Tobacco Press Office           InvestorRelations
David Betteridge/Ann Tradigo/Sarah Corbey       Ralph Edmondson/Rachael Cummins
[phone] (24 hours)                 [phone] or 1519

Notes to editors
     
•    Duvanska Industrija Vranje is one of two Serbian tobacco businesses
     privatised this month.  Around half of Serbia's adult population smokes.
     Typically a local brand costs the equivalent of €0.49 per pack of 20 and 
     Lucky Strike €0.93.


                      This information is provided by RNS
            The company news service from the London Stock Exchange