Alison Cooper has, in the words of her press handler, a “demented schedule”. The 48-year-old chief executive of Imperial Tobacco spent the first half of the week finalising a £4.2bn buyout that will see the Bristol-based company become the third-largest cigarette seller in the US – and the second half hurtling round shareholders convincing them of the deal’s merits.
“We were negotiating up to the last minute,” says Ms Cooper. “It’s been incredibly busy – I like it that way.”
Analysts applauded the deal, which involved Imperial paying less than many had expected for US cigarette brands such as Winston, Kool and Salem from Lorillard, which was itself bought out by US-rival Reynolds American, in a complex three-way transaction.
The praise marked a U-turn for many Imperial-watchers. As recently as last summer Imperial shares were at a two-year low, having been buffeted by falling sales, rising illicit trade and fears of increased regulation. There were rumblings at the time that Ms Cooper could pay the price for the structural problems faced by the company.
“People talked about her not being in a job by Christmas. They were saying: ‘This company is sick; it’s gone’,” says Chris Wickham, an analyst at Oriel. But not all were so dismissive. “I walked away never happier with my buy recommendation,” adds Mr Wickham.
He was proved right. Imperial has put its miserable 2013 behind it, while shares have rallied by 25 per cent since August, hitting an all-time earlier this month.
The US deal is the boldest move yet by Imperial under the cigar-smoking Ms Cooper, who has headed the group since 2010 – becoming only the fifth woman to head a FTSE 100 company in the process.
“Clearly, we like doing deals,” says Ms Cooper, who has been with the group since 1999. “Anyone does – we’re not an exception.”
But the US adventure is not the start of another bout of the dealmaking that transformed Imperial from a division of sleepy UK conglomerate Hanson into the world’s fourth-largest tobacco company by market share during the 1990s and 2000s, insists Ms Cooper.
“It is not a question of returning the business to its record [of M&A],” says Ms Cooper, who was Imperial’s chief operating officer under former chief executive Gareth Davis. “My tenure is about maximising returns.”
Cigarettes are still relatively cheap in the US, especially compared to Europe, which gives plenty of scope for Imperial to raise prices and improve margins. This makes the US, perversely, a growth market from a profit perspective – even as the number of American smokers continues to plunge.
Imperial will have a fight on its hands. With only 10 per cent of the market, it will be far smaller than Marlboro maker Altria, which has half the $90bn market, and the enlarged Reynolds American, which will control more than a third.
“We love challenges. We thrive on it,” says Ms Cooper. “We have to seize the opportunities of being smaller, but more agile.”
This tactic was borne out by the M&A ju-jitsu performed by Imperial on its larger rivals during the deal, which saw Imperial walk away with Lorillard’s Blu – the US’s largest ecigarette brand with 45 per cent of the market.
Competition concerns dogged the deal, meaning that Imperial had to be given a viable US business, which strengthened the British company’s hand.
“Alison understood that they held negotiating power and used it well,” says one analyst. The Blu deal has turned Imperial from a late entrant into the fast-growing e-cigarette market into – arguably – the leading big tobacco company in the category.
Ecigarettes will play a key-role in Imperial’s future, but not in Ms Cooper’s personal smoking habits: “Cigars are still my favourite,” she says.
Get alerts on Imperial Brands when a new story is published