Acquisition

British American Tobacco PLC
28 February 2008

For immediate release: Thursday, 28 February, 2008



                      British American Tobacco to acquire

                       leadership in Scandinavian markets



British American Tobacco is to acquire 100 per cent of the cigarette businesses
of Skandinavisk Tobakskompagni A / S ("ST") and certain snus and roll-your-own
tobacco interests.  ST accounts for more than 60 per cent of cigarette sales in
Scandinavia.



British American Tobacco will exchange its existing 32.35 per cent stake in ST,
at an agreed valuation of DKK 8,947 million (£904 million) and pay DKK 11,384
million (£1,151 million) in cash to settle the transaction.



The overall price, equivalent to DKK 20,331 million (£2,055 million), includes
the buy-out by ST of its snus joint venture partner.



On completion, the transaction will give British American Tobacco's subsidiaries
additional annual sales of approximately 30 billion cigarettes principally
through:


•         market leadership in Denmark and Norway and approximately one-third of
the Swedish market

•         and elevation from fourth to second place in Poland with around
one-third of sales.



ST's cigarettes are sold in around 40 markets. Prince, its premium brand,
accounts for annual volumes of about 7 billion cigarettes in 25 markets - the
largest of which are in Scandinavia.  Smaller markets include Germany, Greece
and the Baltic states.



The roll-your-own business to be acquired has sales equivalent to around 2
billion cigarettes a year.



The acquisition of a 100 per cent stake in Fiedler & Lundgren AB will strengthen
British American Tobacco's snus business and bring in-house manufacturing and
additional expertise.



Fiedler & Lundgren sold almost 16 million tins of snus in 2006 / 07 with market
shares of 6 per cent in Sweden and 4 per cent in Norway.  Brands include Granit,
Mocca and Metropol.



British American Tobacco estimates that the businesses to be acquired generated
earnings before interest, tax, depreciation and amortisation of DKK 1,812
million (£183 million) in 2007.



Paul Adams, British American Tobacco's Chief Executive, said: "This transaction
turns our minority stake in a diversified business into full control of very
profitable cigarette businesses with strong market positions."



In addition, British American Tobacco anticipates that there could be
significant operational efficiencies of approximately £60 million per year by
2011 and one-off cash costs of £115 million.





The transaction, which is subject to approval by the European Commission, is
being financed through a committed bank facility and is expected to be
immediately earnings enhancing.  Completion is anticipated later this year.



The gross assets of the businesses and interests which are being acquired are
approximately DKK 6,700 million (£677 million) based on the year-end 30 June
2007 balance sheet published by ST.



Any future proposals affecting employees would be subject to applicable
information and consultation requirements.



Skandinavisk Holdings, ST's controlling shareholder, will retain the cigar and
pipe tobacco businesses, roll-your-own and smokeless tobacco in Orlik Tobacco
Company and non-tobacco interests in the convenience goods trade and the Tivoli
amusement park in Copenhagen.



Notes to editors



British American Tobacco also publishes today its Preliminary financial results
for the year ended 31 December 2007.



For more about both announcements visit www.bat.com or www.cantos.com for
pre-recorded interviews with Chairman Jan du Plessis, Chief Executive Paul Adams
and Finance Director Paul Rayner and watch the live www.bat.com webcast of the
presentation to analysts and investors from 9.30am today.



Journalists are also invited to attend today's results news briefing at 11am at
British American Tobacco's London head office - Globe House, 4 Temple Place,
London, WC2R 2PG.



•         Exchange rate:  £1 = DKK 9.89



•         British American Tobacco is the world's second largest quoted tobacco
group by global market share, with brands sold in more than 180 markets.  Its
subsidiary companies produced some 684 billion cigarettes through 47 cigarette
factories in 40 countries in 2007 and employed nearly 54,000 people.



•         Skandinavisk Tobakskompagni is among Denmark's largest international
companies and is the parent company of a number of subsidiaries engaged in the
production and sales of tobacco products, the Danish convenience goods trade and
holds a significant stake in Tivoli. The Group employs approximately 12,000
people.



•         The businesses to be acquired from ST include House of Prince A / S in
Denmark, J.L. Tiedemanns Tobaksfabrik AS in Norway and Fiedler & Lundgren AB in
Sweden.



•         British American Tobacco is being advised by Deutsche Bank.





ENQUIRIES



British American Tobacco Press Office
David Betteridge / Kate Matrunola / Cat Armstrong
+ 44 (0) 20 7845 2888 (24 hours)


Investor Relations
Ralph Edmondson / Sharon Woodcock
[phone] / 1519


Skandinavisk Tobakskompagni
Jorgen Tandrup, Supervisory Board Chairman
[phone]


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