SCANDINAVIAN TOBACCO GROUP A/S ACQUIRES PETERSON PIPE TOBACCO FROM KAPP & PETERSON LTD.

COPENHAGEN -- JULY 20, 2018 -- Scandinavian Tobacco Group A/S has today closed a deal to acquire the entire premium pipe tobacco brand portfolio of Peterson Pipe Tobacco from Kapp & Peterson Limited, an Irish pipe and pipe tobacco manufacturer. The terms of the transaction were not disclosed.

Peterson Pipe Tobacco has more than 150 years of storied heritage and is sold in 52 countries around the world.  Within the Peterson brand portfolio are signature blends such as Sherlock Holmes, Old Dublin and Connoisseur's Choice, each recognised for their complexity and premium positioning. Against the backdrop of globally-shrinking volumes for the category as a whole, the Peterson range has delivered consistent volume and revenue growth since 2014.

Executive Vice President of Sales & Marketing in Scandinavian Tobacco Group, Christian Hother Sørensen says: "M&A is part of the Scandinavian Tobacco Group DNA and we have a proven track record of achieving synergies when acquiring brands and businesses.  We are excited about this small and interesting bolt-on acquisition in our pipe tobacco category. In Peterson Pipe Tobacco we are acquiring a sound portfolio of premium brands that will increase our offering to our consumers - and which we can further develop whilst leveraging our sales and marketing competencies."

The acquisition strengthens Scandinavian Tobacco Group's position in the important premium pipe tobacco segment, which has been growing in recent years. Additionally, the brand portfolio of Peterson Pipe Tobacco will further increase the Group's presence in important pipe tobacco markets like Germany, the UK, the US and Asia.

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About Scandinavian Tobacco Group

Scandinavian Tobacco Group A/S with its subsidiaries (the "Group") is a world leading producer of cigars and traditional pipe tobacco. The Group also produces fine-cut tobacco and sells tobacco-related accessories. The Group produces and sells 3 billion cigars and 5,000 tonnes of pipe and fine-cut tobacco annually. Scandinavian Tobacco Group believes it is the only company globally with a core strategic focus on production and distribution in all of these tobacco categories.

Scandinavian Tobacco Group holds market-leading positions in the machine-made cigar market in Europe, the handmade cigar market in the US, the online and catalogue retail sales of cigars in the US, the traditional pipe tobacco market globally and in selected fine-cut tobacco markets.

Scandinavian Tobacco Group has a diversified portfolio of more than 200 brands providing a complementary range of established global brands and local champions. In the cigar segment, the brand portfolio comprises Café Crème, La Paz, Macanudo, CAO, Partagas (US) and Cohiba (US). Pipe tobacco brands include Captain Black, Erinmore, Borkum Riff and W.Ø. Larsen, while leading fine-cut tobacco brands include Bugler, Break, Escort, Bali Shag and Tiedemanns.

As of 31 December 2016, the Group employed 7,600 people in the Dominican Republic, Honduras, Nicaragua, Indonesia, Europe, New Zealand, Australia, Canada and the US.

For more information please visit www.st-group.com.Scandinavian Tobacco Group A/SSydmarken 42DK-2860 Søborg Denmark