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British American Tobacco Plc (LSE: BATS) is the second largest cigarette company in the world. It is based in London and is a constituent of the FTSE 100 Index with a market capitalisation of over ?20 billion as of June 2005. Established in 1902, when the United Kingdom's Imperial Tobacco Company and the American Tobacco Company of the USA agreed to form a joint venture, the British-American Tobacco Company Ltd. The parent companies agreed not to trade in each other's domestic territory and to assign trademarks, export businesses and overseas subsidiaries to the joint venture. James 'Buck' Duke became its chairman. The British American Tobacco business thus began life in countries as diverse as Canada, China, Germany, South Africa and Australia, but not in the United Kingdom or USA. In 1911 the American Tobacco Company sold its share of the company. Imperial Tobacco gradually reduced its shareholding, but it was not until 1980 that it divested its remaining interests in the company. In 1976 the group companies were reorgansied under a new holding company, B.A.T Industries. In 1994 BAT acquired its former parent, American Tobacco Company (though reogranised after anti-trust proceedings). This brought the Lucky Strike and Pall Mall brands into BAT's portfolio. In 1999 it acquired Rothmans International, which included a share in a factory in Myanmar. This made it the target of criticism from human rights groups. It sold its share of the factory on November 6, 2003 after a "exceptional request" from the British government. In 2003, BAT acquired Ente Tabacchi Italiani (ETI) S.p.A, Italy's state tobacco company. The important acquisition would elevate BAT to the number two position in Italy, the second largest tobacco market in the European Union. The scale of the enlarged operations would bring significant opportunities to compete and grow ETI's local brands and BAT's international brands.

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