Sept. 2 (Bloomberg) -- Imperial Tobacco Group Plc, Europe’s second-biggest tobacco company, agreed to buy Dragonite International Ltd.’s electronic cigarette unit for $75 million as it seeks to close the gap on competitors in new products.
The acquisition depends on the approval of Dragonite shareholders, according to Imperial Tobacco spokesman Simon Evans, who declined to comment further today.
The maker of Davidoff cigarettes is trailing the likes of British American Tobacco Plc and Philip Morris International Inc. in developing alternatives to traditional cigarettes in response to stricter government regulations on smoking.
The Bristol, England-based company said last month it was on track to introduce its own alternative nicotine products in 2014 through the Fontem Ventures unit. The Dragonite purchase isn’t related to that announcement, Evans said.
Dragonite founder and executive director Hon Lik invented the electronic cigarette, according to the company’s web site. The company says it owns an “extensive portfolio” of global patents and pending patents covering e-cigarette technologies.
Imperial Tobacco traded 0.6 percent higher at 2,145 pence as of 11:01 a.m. in London. Dragonite International slipped 3.2 percent to HK$1.50 at the close of trading in Hong Kong, giving the company a market value of HK$318 million ($41 million).
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