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Imperial Wins Marlboro UK Rights

Britain's Imperial Tobacco Group Plc yesterday won the lucrative rights to distribute and sell the world's top-selling cigarette brand Marlboro in the UK from U.S. tobacco giant Philip Morris. Cos. Inc.

The agreement follows a high-profile London High Court battle that last month saw the world's largest cigarette company, New York-based Philip Morris, regain control of its top brand in the UK from its arch-rival, British American Tobacco Plc, Reuters reported.

The deal will take effect from mid-September and give Imperial, which already has a roughly 40-percent share of the UK cigarette market and access to the strong growth of the key brand Marlboro Lights in Britain, as well as Marlboro.

"This is modestly positive for Imperial, but is largely as expected. Imperial is a good choice for Philip Morris as Marlboro Lights will grow faster with access to Imperial's big sales force," said analyst Jonathan Fell at Merrill Lynch.

Marlboro brands have a UK market share of around six percent with Marlboro Lights at 4.5 percent and Marlboro 1.5 percent. Philip Morris has a relatively low 6.8 percent share of the UK cigarette market, including brands such as Raffles which are not part of this deal, compared with an average 37 percent share across continental Europe, the report said.
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