Financial News

  • 26 December 2013, 2:24

Tobacco Boss Quits Helm Of Silk Cut-Maker

The executive who orchestrated Japan's biggest-ever takeover of a British company has quit his role at the helm of the manufacturer of Benson & Hedges and Silk Cut.

Sky News has learnt that Pierre de Labouchere, the president and chief executive of Japan Tobacco International (JTI), resigned with immediate effect.

The departure of Mr de Labouchere, who led Japan Tobacco's 7.5bn acquisition of Gallaher International in 2007, surprised analysts, who said they expected that the exit of such a senior executive would have been the subject of a public announcement.

JTI accounts for over half of its parent's global earnings and through its ownership of Gallaher's brands, which also included Mayfair, it now jostles with Imperial Tobacco for leadership of the UK cigarette market. British American Tobacco has a vast international presence but a comparatively small share of the UK market.

Mr de Labouchere has been replaced by Tom McCoy, previously the chief operating officer.

In a statement issued on Friday, a JTI spokesman said: "I confirm that Mr. Pierre de Labouchere has decided to resign from his position as President and Chief Executive Officer of JTI as of December 18th.

"Mr Thomas A McCoy has been appointed President and Chief Executive Officer of JTI. He brings in-depth knowledge of the business and a wealth of experience to this new responsibility. His 14 years with JTI have generated a proven track record of success in leading the international tobacco business at JTI."

JTI declined to comment on the reasons behind Mr de Labouchere's sudden departure but insiders said that another senior executive responsible for the company's mergers and acquisitions activity had also quit in recent days, suggesting some kind of strategic disagreement.

Mr de Labouchere, one of the most senior Frenchmen in a major Japanese company, led the takeover of Gallaher having previously been president of JR?Reynolds' international operations, which were acquired by JTI in 1999.

JTI's UK operation is run directly by Jorge da Motta, who took over earlier this year.

He warned on his appointment that "the most challenging dynamic for the UK business is the high tax regime and the corresponding high level of non-UK duty paid cigarettes at a time when the Government is consulting on plain packaging".

"This makes the threat to legitimate businesses both small and large significant and dangerous," he added.

Headquartered in Geneva, JTI recorded sales of $11.8bn (7.2bn) in 2012. The company has operations in more than 120 countries and about 25,000 employees.

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