Nigerian Watchdog Hits British American Tobacco With Record $110M Fine Over Alleged Market Abuse
Portfolio Pulse from Vandana Singh
British American Tobacco Industries Plc (NYSE:BTI) was fined $110 million by the Nigerian Federal Competition & Consumer Protection Commission for violating competition laws and tobacco control efforts. This record fine is a result of a probe into BAT's practices, including impeding competitors and breaching health controls. The fine is a 'consent order' and not subject to appeal. BAT is also expected to incur a non-cash impairment charge of about £25 billion related to U.S. cigarette brands and anticipates 2023 organic revenue at the lower end of 3%-5% guidance. BTI shares saw a slight increase in premarket trading.
December 29, 2023 | 1:48 pm
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NEUTRAL IMPACT
British American Tobacco was fined $110 million by the Nigerian FCCPC for competition law infringements, which could negatively impact investor sentiment. However, the company's stock price increased slightly in premarket trading.
The fine represents a significant penalty and could harm the company's reputation and financials, potentially leading to negative investor sentiment. However, the premarket stock price increase suggests that the market may have already anticipated this news or deemed it less significant in the context of the company's overall financial health. The non-cash impairment charge is also a factor that could influence the stock price, but it seems to have a neutral effect in the short term.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 100