Wrap Text
BAT enters strategic r&d collaboration to accelerate
‘beyond nicotine’ strategy with Organigram
British American Tobacco p.l.c.
Incorporated in England and Wales
(Registration number: 03407696)
Short name: BATS
Share code: BTI
ISIN number: GB0002875804
BAT enters strategic R&D collaboration to accelerate ‘beyond nicotine’ strategy with Organigram
• BAT subsidiary acquires 19.9% equity investment in Organigram, a leading Canadian cannabis licensed
producer
• Product Development Collaboration Agreement leverages combined expertise in plant-based science
and product development
• Complements strong momentum in New Category Brands and supports delivery of BAT’s purpose of
building A Better Tomorrow™
LONDON – 11 March 2021: BAT Group (BAT) today announces the signing of a strategic collaboration
agreement with Organigram Inc., a wholly-owned subsidiary of publicly-traded Organigram Holdings Inc.
(collectively Organigram), focused on research and product development activities of next generation adult
cannabis products, with an initial focus on cannabidiol (CBD).
This agreement augments ongoing BAT activities to expand its portfolio ‘beyond nicotine’ and follows the pilot
launch of Vuse CBD Zone in Manchester, UK earlier this year. The collaboration reinforces BAT’s consumer-
centric multi-category approach, which has seen continued momentum and growth as BAT focuses on
delivering on its purpose of building A Better Tomorrow™.
Through the collaboration, BAT will gain access to cutting-edge R&D technologies, product innovation and
cannabis expertise, complementing BAT’s extensive plant-based expertise and development capabilities.
Organigram has a proven track record of consumer-led innovation and developing high quality adult-use
recreational and medical cannabis products, which are legally available in Canada. By leveraging Organigram’s
first-hand experience, BAT will deepen its understanding of this rapidly expanding and evolving area.
Dr David O’Reilly, Director Scientific Research at BAT, comments: “Today’s announcement underscores
our commitment to accelerating our transformation and building A Better Tomorrow. Our multi-category,
consumer-centric approach, which is key to our transformation, aims to provide choice and meet the evolving
needs of adult consumers. This choice provides reduced risk alternatives* to combustible cigarettes, as well as
going beyond tobacco and nicotine into new and exciting areas of product innovation.
“We believe this collaboration has significant potential to enhance our activities, allowing us to combine our
world-class expertise while enabling scientists from both BAT and Organigram to work closely together and
share information real-time. We know that in R&D this is how you make real breakthroughs and accelerate
progress.
“We have been impressed by the strong management team and culture at Organigram. This collaboration
aligns with our long-term strategy, and will enable us to work with Organigram at an R&D level, as well
contributing to their wider operations.”
Greg Engel, Chief Executive Officer of Organigram, comments: “This is a tremendous milestone in the
evolution of Organigram. It is instrumental in advancing our commitment to offering consumers innovative
cannabis products and to furthering our long-term international strategy. We have been extremely selective
about aligning with a strategic partner and, in BAT, we’ve found a leading consumer goods business with
innovative product platforms, an impressive dedication to research and development, deep consumer insights,
regulatory expertise and a commitment to responsible stewardship and consumer safety.”
Deal terms
To operationalise the ‘Product Development Collaboration Agreement’ (PDC) a “Centre of Excellence” will be
established to focus on developing the next generation of cannabis products with an initial focus on CBD. The
Centre of Excellence will be located at Organigram’s indoor facility in New Brunswick, Canada, which holds the
Health Canada licenses required to conduct R&D activities with cannabis products. Both BAT and Organigram
will contribute scientists, researchers, and product developers to the Centre of Excellence which will be
governed and supervised by a steering committee consisting of an equal number of senior members from each
of BAT and Organigram. Both partners share a commitment to continue to maintain the highest regulatory
and ethical standards.
As part of the transaction, BAT and Organigram will grant each other a licence to certain intellectual property
to enable the development of new and potentially disruptive, novel products. Both parties will have the ability
to independently commercialise any products developed as a result of the collaboration under their own
brands.
Under the terms of the transaction, a BAT subsidiary will acquire a 19.9% equity stake in Organigram Holdings
Inc. (listed on both the Nasdaq and Toronto Stock Exchange under the symbol “OGI”) to become the largest
shareholder, with the ability to appoint two directors to Organigram Holdings Inc.’s board of directors and
representation on its investment committee. At closing, one BAT nominee, Mr. Jeyan Heper, was added to the
board and another nominee is expected to be added in the near term.
The investment, valued at approximately £126 million, was priced at C$3.79 per share which was based on the
five-day volume weighted average price of Organigram Holdings Inc.’s shares on the Toronto Stock Exchange
ending March 9, 2021 and represents a discount to the closing price of C$3.94 on March 9, 2021. These funds
will provide a significant injection of capital for Organigram that will enable them to expand and accelerate their
R&D and product development activities, and support business expansion.
ENDS
NOTES TO EDITORS
BAT has considered its obligations under applicable laws and regulations in undertaking this Transaction and has taken
appropriate measures to ensure compliance with such laws.
About BAT
BAT is a leading, multi-category consumer goods business, established in 1902. Our purpose is to build A Better
Tomorrow™ by reducing the health impact of our business which entails:
• Committing to providing adult consumers with a wide range of enjoyable and less risky products
• Continuing to be clear that combustible cigarettes pose serious health risks, and the only way to avoid these risks
is not to start or to quit
• Encouraging those who otherwise continue to smoke, to switch completely to scientifically-substantiated,
reduced-risk alternatives*
• Tracking and sharing progress of our transformation
The company has announced a target of increasing the number of its non-combustible product consumers to 50 million by
2030; and to achieve at least £5 billion in New Categories revenues in 2025.
* Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free
and are addictive.
About Organigram Holdings Inc.
Organigram Holdings Inc. is a NASDAQ Global Select and TSX listed company whose wholly owned subsidiary, Organigram
Inc., is a licensed producer of cannabis and cannabis-derived products in Canada.?
Organigram is focused on producing high-quality, indoor-grown cannabis for patients and adult recreational consumers in
Canada, as well as developing international business partnerships to extend the Company's global footprint. Organigram has
also developed a portfolio of legal adult use recreational cannabis brands including The Edison Cannabis Company, SHRED
and Trailblazer. Organigram's facility?is located in?Moncton, New Brunswick and the Company is regulated by the?Cannabis
Act and the?Cannabis Regulations?(Canada).
Enquiries
Press Office
+44 (0) 20 7845 2888 (24 hours) | @BATplc
Investor Relations
Mike Nightingale: +44 (0)20 7845 1180
Victoria Buxton: +44 (0)20 7845 2012
William Houston: +44 (0)20 7845 1138
John Harney: +44 (0)20 7845 1263
Forward-Looking Statements
References to ‘BAT’, ‘BAT Group’, ‘we’, ‘us’ and ‘our’ refer to BAT Group operating companies, collectively or individually as the case may
be. This release contains certain forward-looking statements, including “forward-looking” statements made within the meaning of the US
Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases
such as “believe,” “anticipate,” “could,” “may,” “would,” “should,” “intend,” “plan,” “potential,” “predict,” “will,” “expect,” “estimate,”
“project,” “positioned,” “strategy,” “outlook”, “target” and similar expressions. These include statements regarding our intentions, beliefs
or current expectations reflecting knowledge and information available at the time of preparation, and concerning our results of
operations, financial condition, liquidity, prospects, growth, strategies and the economic and business circumstances occurring from time
to time in the countries and markets in which BAT Group companies operate, including the projected future financial and operating
impacts of the COVID-19 pandemic.
All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors. It is
believed that the expectations reflected in this release are reasonable but they may be affected by a wide range of variables that could
cause actual results to differ materially from those currently anticipated.
Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are
uncertainties related to the following: the impact of adverse domestic or international legislation and regulation; the inability to develop,
commercialise and deliver BAT’s New Categories strategy; the impact of significant increases or structural changes in tobacco, nicotine and
New Categories-related taxes; changes or differences in domestic or international economic or political conditions; the impact of serious
injury, illness or death in the workplace; adverse decisions by domestic or international regulatory bodies; and the inability to lead the
development and roll-out of BAT innovations (New Category products and combustibles), including as a result of unsuccessful research and
development or a failure to develop robust scientific risk assessment frameworks. The forward-looking statements reflect knowledge and
information available at the date of preparation of these materials, and BAT undertakes no obligation to update or revise these forward-
looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance
on such forward-looking statements.
The material in this release is provided for the purpose of giving information about BAT to stakeholders only and is not intended for
general consumers. BAT, its directors, officers, employees, agents or advisers do not accept or assume responsibility to any other person to
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in this release is not provided for product advertising, promotional or marketing purposes. This material does not constitute and should
not be construed as constituting an offer to sell, or a solicitation of an offer to buy, any of our products. Our products are sold only in
compliance with the laws of the particular jurisdictions in which they are sold.
Additional information concerning these and other factors can be found in British American Tobacco p.l.c.’s filings with the US Securities
and Exchange Commission (“SEC”), including the Annual Report on Form 20-F and Current Reports on Form 6-K, which may be obtained
free of charge at the SEC’s website, http://www.sec.gov.
11 March 2021
Sponsor: UBS South Africa (Pty) Ltd
Date: 11-03-2021 01:10:00
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