LONDON -- After receiving the go-ahead from the U.S. Federal Trade Commission to proceed with its plans to acquire American Tobacco Co., B.A.T. Industries here announced dramatic work force reductions and other sweeping changes.
About 1,230 U.S. field sales personnel will be laid off as B.A.T. goes about its aim of consolidating the operations of its American subsidiary Brown & Williamson Tobacco Corp., Louisville, Ky., with its new acquisition.
"We are offering about 150 former American Tobacco sales employees part-time positions to assist our field sales force on supporting our brands and our business," said Tom Fitzgerald, a B&W spokesman. B&W operates 30 sales offices throughout the United States.
Fitzgerald acknowledged that B&W's sales organization recently underwent a review, but he declined to outline its new structure.
"We went through a fairly detailed analysis of our own internal operations here, so we're confident our sales force is structured appropriately," he said.
With the addition of American Tobacco's stable of brands, B&W's U.S. market share will jump from 11% to 17%, according to a statement released by the company, putting it in third place, behind R.J. Reynolds Tobacco Co. and Philip Morris USA.
New to B&W are Lucky Strike, Pall Mall, Carlton, Misty, Private Stock and several private labels. They will be added to the company's own brands -- Kool, GPC and Capri.
"We have consistently argued that the acquisition, as well as making financial sense for B.A.T. shareholders, will benefit U.S. consumers through the creation of a more effective third force in the market," said Martin Broughton, chief executive of B.A.T..
As the result of an agreement with the FTC, B.A.T. has agreed to divest American's Montclair and Tareyton labels in the United States, along with other "minor discount brands." B.A.T. will retain international ownership of them.
B.A.T. also plans to close several American facilities, including sites in Chester, Va., and Stamford, Conn., meaning the loss of 450 research and administrative jobs. Some employees will be offered positions with B&W. Functions performed at these locations will be assumed by B&W operations.
American's cigarette manufacturing facility in Reidsville, N.C., will be put on the market as part of the FTC arrangement. Brands manufactured there will gradually be transferred to B&W's own plant in Macon, Ga. Two other American facilities -- manufacturing sites in Chester, Va., and Durham, N.C. -- will continue operating.
"The consolidation will produce significant efficiencies in sales, leaf purchasing and administration, research and administration by centralizing these functions with B&W's administrative, research, leaf purchasing, marketing and field sales staffs," said B&W.
