Imperial Brands, the Bristol-based cigarette maker behind Golden Virginia, has acquired US tobacco alternative business Black Buffalo for an initial $150 million, the company announced on Wednesday. The deal includes a deferred payment based on performance over three years, as the firm expands its range of non-traditional tobacco products amid declining cigarette smoking rates.
Acquisition Details
Black Buffalo, established in 2015 and headquartered in Chicago, produces oral products such as pouches designed to replicate the taste and ritual of traditional tobacco without using the leaf or stem. The company uses a farm-to-can process, manufacturing its products in North Carolina from US-grown barn-cured leafy greens, with nicotine and flavourings added.
Imperial Brands stated that Black Buffalo offers "a differentiated experience and appeals to different consumers" compared to Zone, its own US range of flavoured nicotine pouches. The acquisition aligns with Imperial's strategy to build a stronger next-generation product portfolio in markets with attractive long-term growth opportunities.
Executive Comments
Lukas Paravicini, chief executive of Imperial Brands, said: "This acquisition reflects our disciplined and focused approach to building a stronger next generation product portfolio in markets where we see attractive long-term growth opportunities. Black Buffalo is a strong, challenger brand with a highly differentiated proposition and complements our broader growth strategy."
Mark Hanson, co-founder and president of Black Buffalo, added: "Black Buffalo was built on innovation, deep consumer insights and a commitment to differentiated alternatives for adult consumers. We are excited about the opportunity with our new colleagues to combine our brand and product expertise with their scale, resources and commercial capabilities."
Advisors and Future Outlook
Imperial Brands was advised by Morgan Stanley, KPMG, and White & Case, while Black Buffalo was advised by Goldman Sachs and Paul, Weiss, Rifkind, Wharton & Garrison. The Black Buffalo team will join Imperial Brands as part of the transaction.
The announcement comes as Imperial focuses on tobacco-free and alternative products, with smoking rates continuing to decline. The company confirmed on Wednesday it remains committed to an ongoing multi-year share buyback programme. Earlier in May, Imperial warned that a protracted conflict in the Middle East could impact input costs and consumer demand, including duty free, but reiterated its guidance for the financial year.
