According to Leah Montebello's report on March 16, British American Tobacco (BAT) is launching its first share buyback in two years. At the same time, British American Tobacco is selling approximately 4.5% of its 30% stake in ITC, or around 4.369 billion shares.
According to reports, FTSE 100 tobacco group is planning to use its post-sale revenue to repurchase BAT shares between now and December 2025, starting with a £700 million buyback this year. This will mark the first repurchase program initiated by BAT since 2022, and yesterday's announcement led to a 2% surge in shares. BAT has held shares in ITC for over 100 years, with its ownership facing various regulatory restrictions over the years.
Last month, BAT announced that the company is in negotiations regarding the sale of a £1.5 billion stake in ITC. BAT CEO Tadeu Marroco stated that this move would provide an opportunity to "unlock and reallocate some capital" for shareholders. The company also owns brands such as Lucky Strike and Camel, and last February implemented a £2 billion share buyback plan without renewing it.
According to this plan, BAT will retain a 25.5% stake in ITC. Analyst Owen Bennett of Jefferies stated that this move indicates BAT's desire to profit from the thriving tobacco market, as competitors are unable to enter the market due to government restrictions on foreign direct investment in the tobacco industry. With the government planning to introduce taxes on e-cigarettes and raise tobacco taxes starting in October 2026, this industry is facing significant changes.
Imperial Brands, the main competitor, is still carrying out its £1 billion share buyback program, while Universe Holdings, which is listed on the New York Stock Exchange, announced an £800 million buyback plan last month.
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