BRITISH AMERICAN TOBACCO PLC - British American Tobacco reinforces commitment to next generation products

British American Tobacco reinforces commitment to next generation products

British American Tobacco p.l.c.
Incorporated in England and Wales
(Registration number: 03407696)
Short name: BATS
Share code: BTI
ISIN number: GB0002875804
("British American Tobacco p.l.c." or "the Company")


    BRITISH AMERICAN TOBACCO REINFORCES COMMITMENT TO NEXT GENERATION PRODUCTS
                              WITH TWO ANNOUNCEMENTS

-   A conditional agreement to acquire 100 percent of the CHIC Group: the market leading e-
    cigarette business in Poland.
-   A vapour technology-sharing term sheet with R.J. Reynolds Tobacco Company

CHIC Group Agreement

British American Tobacco has signed a conditional agreement to acquire 100 percent of the CHIC
Group. The CHIC Group has 800 points of sale in Poland, a dedicated e-liquids production facility, a
modern research and development centre and leading Polish e-cigarette brands including VOLISH,
P1, Provog, Cottien, LiQueen and Aromativ.

Commenting on the agreement, Managing Director of Next Generation Products (NGP) at British
American Tobacco, Kingsley Wheaton said: “Acquiring the CHIC Group is strategically significant and
makes commercial sense. It provides BAT with scale and market reach through Europe’s largest
eCigarette retailing network, as well as important manufacturing and R&D capabilities. It further
demonstrates our commitment to the NGP category."

The proposed acquisition is subject to approval from the Polish anti-trust authority, the Office of
Competition and Consumer Protection (OCCP).

Technology-sharing term sheet with R.J. Reynolds Tobacco Company

British American Tobacco further announces today that it has signed a vapour products technology-
sharing term sheet with R.J. Reynolds Tobacco Company (RJRTC), a subsidiary of Reynolds American
Inc. (RAI). The term sheet provides a framework for collaboration and mutual cross-licensing of the
parties’ vapour product technologies up to 31 December 2022.

The collaboration also includes joint R&D activities and cooperation on regulatory, scientific and
manufacturing issues relating to vapour products.

Following further negotiations, both companies are expecting to conclude and sign a legally binding,
definitive agreement by year-end 2015.

Wheaton concludes: “Today, we’ve announced two significant milestones to enhance our next
generation product business globally, further enabling us to meet the demands of today’s
consumer.”


ENQUIRIES

Press Office                                     Investor Relations
Will Hill / Anna Vickerstaff                     Mike Nightingale / Rachael Brierley
+44 (0) 20 7845 2888 (24 hours)                  + 44 (0) 20 7845 1180 / 1519
NOTES TO EDITORS

BAT is a global tobacco Group with brands sold in more than 200 markets. It employs more than
57,000 people worldwide and has over 200 brands in its portfolio, with its cigarettes chosen by one
in eight of the world’s one billion smokers. BAT has leadership in more than 60 markets around the
world. The Group generated £5.4 billion adjusted profit from operations in 2014.

BAT is being advised on the acquisition of CHIC by Deloitte LLP, Herbert Smith Freehills LLP and WKB
Wierci?ski, Kwieci?ski, Baehr Sp.k.


22 September 2015

Sponsor: UBS South Africa (Pty) Ltd

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