BAT buy Bentoel US$494 million

British American Tobacco Plc,will buy control of PT Bentoel Internasional Investama of Indonesia, the nation with Asia's most lax restrictions and most smokers after China and India.
BAT today said it will pay $494 million for 85 percent of Bentoel, marking its first foray into clove-flavored cigarettes, known as kretek in Indonesia for the crackling sound they make
when lit.
Bentoel, whose brands include Star Mild, will help BAT boost its local market share to about 9 percent. BAT, the London-based maker of Lucky Strike, is expanding in a country with few of the restrictions seen in Europe and the U.S.
More than 90 percent of Indonesia's tobacco users smoke kretek, which can contain double the nicotine and almost triple the tar of conventional tobacco, and minors can buy a cigarette
for less than 4 cents.
BAT acquired 56 percent of Bentoel from the Rajawali Group, controlled by billionaire Peter Sondakh, and the balance from other investors. Bentoel is the fourth-largest maker of kretek,
trailing market leader PT HM Sampoerna, bought by Philip Morris International Inc. in 2005.