Imperial Brands' Strategy: Simplify & Spend

GREENSBORO, N.C. — Imperial Brands is moving forward with a new strategy focused on cost savings and brand marketing.

The move comes as it faces a potential bigger competitor with the possible merger of British American Tobacco (BAT) and Reynolds American Inc. In mid-October, BAT made a $47-billion offer to acquire the 58 percent of RAI common stock that BAT does not currently own, as CSNews Online previously reported.

The U.K.-based tobacco company, parent of Greensboro, N.C.-based ITG Brands LLC, revealed it plans to spend approximately $930 million over the next three years to make its business more streamlined and efficient, according to Reuters.

Part of the company's simplification strategy is reducing the number of brands it sells. It currently has 184 brands, but is aiming to get down to around 125 or less. 

With the effort, the company expects to see an additional savings of roughly $374 million by 2020. 

In turn, Imperial said it would spend a similar amount this year on growth opportunities in some of its top markets, the news outlet added.

Last year, Imperial acquired several U.S. brands as part of the RAI and Lorillard Inc. merger. The deal boosted Imperial, and its U.S.-subsidiary ITG Brands, to the No. 3 player in the U.S. tobacco industry. Under the deal, Imperial purchased the KOOL, Salem, Winston, Maverick and blu eCigs brands, as well as other assets and liabilities for $7.1 billion in cash.

"We're building a stronger high-quality business," Chief Executive Alison Cooper said.