Scandinavian Tobacco Group (OTC:SNDVF), or STG, is a well-known tobacco company from Denmark with a significant presence in the European and North American cigar, pipe tobacco and fine-cut tobacco categories.
The company was listed on the stock exchange in Copenhagen in 2016, several years after it was created through the merger of Swedish Match’s (OTCPK:SWMAY) US handmade cigars and pipe tobacco business and Scandinavian Tobacco’s European machine-made cigars and pipe tobacco businesses. Both Swedish Match and Scandinavian’s holding company (Skandinavisk Holding) held significant equity stakes in the business after the IPO, but Swedish Match has used the company’s public listing to decrease its stake to zero. Skandinavisk Holding remains a substantial shareholder.
STG has been a relatively active acquirer of smaller companies; most pipe smokers will recognize its connection with Lane Ltd., which it acquired from Reynolds American, now part of British American (BTI), back in 2011 and has pursued multiple smaller deals in the cigars category, such as those of Verellen and Torano in 2014. The company also has some exposure to other products, including products distributed for Swedish Match like Cricket lighters and several brands of matches.
The company has a leading position in the US handmade cigar category, a global no.2 position in cigars generally, and it is the market leader in pipe tobacco overall. But all of its categories are relatively small when compared to cigarettes or even smokeless tobacco products and the growth outlook for several of the company’s product categories is not particularly rosy. Pipe tobacco in particular, and machine-made cigars in Europe, have experienced quite significant category declines during recent years.
So, in general some moderately good news for Scandinavian Tobacco Group and good news for those of us who love their blends.