Swedish Match acquires R.J. Reynolds Cigar business in Finland

11/27/1997 6:00 AM EST

Swedish Match has entered into an agreement with R.J. Reynolds International
regarding the acquisition of the production operations of the cigar plant in
Pietersaari in Finland per December 1, 1997.

According to the terms of the agreement, all cigar brands will be transferred
to Swedish Match. However, R.J. Reynolds OY will on behalf of Swedish Match
continue to handle the sales, marketing and distribution of the cigars as
previously.

The cigar business of R.J. Reynold in Finland will be integrated in the cigar
division of Swedish Match. The personnel will be employed by Swedish Match
with pre-existing terms and conditions.

Through the agreement Swedish Match will get access to the Finish market with
strong, well known and leading brands such as Hofnar, Van Kemp and some other
strong local brands. Before the acquisition Swedish Match had no cigar
position in Finland.

The integration of the RJR Finland Cigar activities will create further
synergistic effects at the purchase of tobacco and packaging as well as
production.

Swedish Match is a company specialised in tobacco products, matches and
lighters with a turnover of approximately 7.500 MSEK. Swedish Match is a
listed company both at the Stockholm Stock Exchange and at the Nasdaq Stock
Exchange, in New York.

The Swedish Match cigar division is one of the world's leading cigar
manufactures, well known for its quality cigar products that are sold in more
than 90 countries.

The cigar division, with 6 factories in Holland, Belgium, Germany and
Indonesia, has a long tradition of producing famous brands such as La Paz,
Willhem II, Clubmaster, Justus van Maurik and Montague with strong market
positions in many parts of the world.

For further information, please contact:
Bo Aulin, Senior Vice President, Corporate Affairs Office: +46 8
658 03 64
Mobile: +46 70 558 03 64
Residence: +46 8 768 45 22

Göran Ekdahl, Vice President, Corporate Communication Office: +46 8
658 01 62
Mobile: +46 70 858 11 62
Residence: +46 8 768 38 22

Boel Sundvall, Vice President, Investor Relations Office: +46 8
658 01 73
Mobile: +46 70 651 39 09
Residence: +46 8 25 87 12

Background information

The Finnish cigar market has increased since 1994 to a level of 65 million
sticks in 1996. The trend is stable or slightly increasing, supported by a
cigar boom in US and similiar trends in Europe and other markets.

R.J. Reynold's own cigar brand activities show a 67% market share of the total
Finnish cigar market which has a total value of 110-120 MSEK 1996. Total
exports are 7 million cigars with presence in Scandinavian and Baltic Duty
Free, Sweden and some other countries.

The size of the total Swedish Match cigar business is over 1 billion cigars
per year with a total sale of 678 MSEK (1996). The cigar division recently
introduced a premium high quality, totally hand made longfiller cigar in the

US and some European markets, consolidating its position as quality cigar
manufacturer. The division's strongest markets are West Europe and North
Europe and other international markets like Australia, Thailand etc. Next to
that North America is becoming an important market.