Amer Group has today reached an agreement with Philip Morris regarding its tobacco business.

Amer will withdraw from its tobacco business on 26 March 2004 as Philip Morris has agreed to buy back the exclusive right Amer Tobacco Ltd holds to produce and sell Philip Morris cigarettes in Finland. Additionally, Philip Morris will acquire Amer Tobacco’s cigarette trademarks and certain machinery and equipment. The consideration will be EUR 29 million and the estimated positive impact on Amer’s operating profit in the first quarter of 2004 will be EUR 18 million. In addition, Philip Morris will also acquire Amer Tobacco’s inventory following a physical count on 26 March 2004.

After 26 March 2004 a Philip Morris affiliate will be responsible for the sales of Philip Morris brands of tobacco products in Finland.

Seventy Amer Tobacco staff are being transferred to Philip Morris as part of the agreement. Amer Tobacco’s factory premises are not included in the deal.

The transaction requires approval from the relevant competition authorities.