Net cash proceeds of £958mln are expected after tax and other costs, with the transactions expected to close before the end of September, with €88mln deferred for 12 months from close and a further €69mln contingent upon transfer of the handmade premium cigar factory in the Dominican Republic.
Paying down net debt, which stood at just under £12bn at the end of September, will reduce pro-forma net debt to around 0.2 times underlying profits, the company noted.
The Premium Cigar unit, which is made up of US-based Tabacalera and four 50%-owned joint ventures with the government of Cuba to export hand-rolled Cuban cigars, contributed £226mln of net revenue and £80mln of profit before tax in the last full year.
Joint interim chief executives Dominic Brisby and Joerg Biebernick, who are in charge until new CEO Stefan Bomhard begins in July, said: “We are delighted to be able to announce the sale of Premium Cigars in the current challenging global environment.”
They added: “This disposal reinforces our strategic ambition of becoming a leaner and more agile organisation and the proceeds will realise value for shareholders by reducing debt as part of our ongoing focus on active capital management.”
Imperial Brands shares rose more than 3% to 1,602.6p by mid-morning on Monday.