Swedish Match acquires snus maker V2 Tobacco

Swedish Match acquires Danish snus manufacturer V2 Tobacco!

In a surprise announcement this morning, V2 Tobacco announced they had been aquired by Swedish Match AB. V2 Tobacco is a privately held smokeless tobacco company, primarily active in Europe. V2 Tobacco is headquartered in Silkeborg, Denmark.

To snus users around the world, V2 is most famous for their Thunder Snus line of high nicotine snuses.

Thunder Snus released the first of the extra strong nicotine snuses back in 2009. Today, almost every brand of snus is represented and the Extra Strong Snus category is the best selling group across Norway, the USA, and through internet snus shops.

In hindsight, the sale of V2 is a little less shocking although Swedish Match being the purchaser is. V2 Co-Founder Patrick Vogel stepped away from the business a year ago to concentrate on a new venture.

Swedish Match being the purchaser is a shock, though. SwM and V2 have had a contentious relationship over the last 10 years resulting in multiple lawsuits and a very public media battle.

One reason for the purchase may be V2’s chew bag position in Europe where the EU still clings to their outdated ban on Swedish Snus. Swedish Match has had limited success in this area.

V2’s Snus Factory in Denmark is also second only to Swedish Match when it comes to state-of-the-art production facilities. V2 has been following Swedish Match’s GothiaTek production standards for years.

Reasons listed for the acquistion include:

Solid growth in the modern chewing tobacco segment, with chew bags
Active and growing in many markets, notably in Denmark, Germany as well as on-line, with a small but dynamic presence in Scandinavian markets outside of Denmark
Main brands include Thunder, Offroad, and Phantom (chew bags and snus)
Production in Silkeborg, Denmark (meaning outside of Sweden)
Annual turnover in the range of 160 MSEK, and approximately 60 employees (FTE)
V2 Tobacco is a Danish company, founded in 2006 with modern and flexible production facilities in Silkeborg, Denmark. The yearly production volumes include close to 20 million cans of chew bags and snus combined.

V2 Tobacco’s portfolio consists of brands including Thunder, Offroad, and Phantom. The company is active in more than 25 markets, with the main markets being Denmark, Sweden and Norway, Germany, Switzerland, on-line, and a small but growing presence in certain other European markets.

In this transaction, Swedish Match will acquire 100 percent of the shares in V2 Tobacco (production and sales/marketing in Denmark). The current CEO and one of the founders of the company, Marc Vogel, has agreed to remain with the Company, which will be operated for the most part independently from other Swedish Match businesses.

The closing date of the transaction was August 31st. Swedish Match wasted no time making this clear: if you go to the V2 website today, the V2 logo still comes up in the tab but instead of V2, it now says Swedish Match.

“We are very excited about this transaction,” said Lars Dahlgren, President and CEO of Swedish Match. “A vibrant and independent V2 Tobacco business fits very well as a complement to our existing organization. V2 Tobacco´s modern and adaptable production allows Swedish Match improved flexibility and expanded opportunities to adapt to changing consumer desires, helping Swedish Match to move further toward its vision of a world without cigarettes.”

”It has been of importance to us to find a buyer who shares our values and ambitions for the future. With their long history, competence and their extensive work with product quality, Swedish Match will give our operation in Silkeborg new and better opportunities to develop and grow, says Marc Vogel.”

Patrick Vogel added “It is very good thing for the future of the company and its employees. Silkeborg will be the base for all countries except Norway and Sweden.”

Details of the purchase price have not been disclosed although it has been described as an offer one could not say no to.

Congratulations to Swedish Match for a completely unexpected but brilliant business decision in today’s volitile snus market…and of course to Marc and Patrick Vogel on turning their snus dream into gold.

LARRY WATERS