Remgro: Distributing its Tobacco Interests

Description

Remgro: Distributing its Tobacco Interests: Abstract

Remgro: Distributing its Tobacco Interests is case study by Mthuli Ncube and Clare Michell.

It was December 2009, just over a year since Remgro Limited (Remgro) had completed the distribution of its indirect shareholding in British American Tobacco plc (BAT): 90% of its shares had gone to its shareholders, while the balance of 10% went to a new investment vehicle listed on the Luxembourg Stock Exchange, called Reinet Investments. The shares received by Remgro in Reinet Investments were also distributed to its shareholders. Thys Visser, chief executive officer of Remgro, sat in his Stellenbosch office and reflected upon the transaction, which had resulted in the largest dividend distribution in the corporate history of South Africa. The process had taken approximately two years from start to finish, and Visser concluded that the transaction had been implemented and completed successfully. “Our shareholders got direct access to the asset [BAT shares] and we didn’t sell out – and we found a sustainable solution,” he explained.

Teaching objectives

The teaching objectives of this case are to enable learning about the principles for successful unbundling in a large organisation.