Acquisition of Interest, etc

BRITISH AMERICAN TOBACCO PLC
3 August 1999


BRITISH AMERICAN TOBACCO TO FOCUS ITS CANADIAN INTERESTS ON TOBACCO IN
LINE WITH GROUP STRATEGY
                                    
British American Tobacco announces that it has entered into an agreement
with Imasco Limited to acquire the 58 per cent shareholding in Imasco it
does not already own for cash, through a wholly owned Canadian subsidiary.

The cash consideration to be paid will be a minimum base price of
C$40.00 per Imasco common share, valuing the fully diluted share capital
of Imasco at C$17.6 billion (£7.3 billion) and the 58 per cent of Imasco
not owned by British American Tobacco at C$10.3 billion (£4.2 billion).

Imasco is a Canadian diversified holding company listed on the Toronto
and Montreal stock exchanges.  Its principal interests are in tobacco,
financial services, retailing and property development.  In 1998, Imasco
reported consolidated profit before tax of C$1.3 billion (£530 million)
and closing net assets of C$3.7 billion (£1.5 billion).

British American Tobacco has concurrently entered into an agreement with
The Toronto-Dominion Bank (TD Bank), under which TD Bank will make a
cash offer of C$67 per share for all of the common shares of Imasco's
98.2 per cent owned subsidiary, CT Financial Services.

This transaction, which would result in proceeds of C$7.85 billion (£3.2
billion) to British American Tobacco, is to be completed immediately
following British American Tobacco's acquisition of Imasco and
is inter-conditional with the Imasco acquisition.  TD Bank's obligation
to complete its purchase of CT Financial Services is subject to certain
other conditions, including obtaining regulatory clearances.  In 1998,
CT Financial Services reported profit before tax of C$447 million (£184
million) and closing net assets of C$2.9 billion (£1.2 billion).

Beginning immediately, sale processes for Imasco's drugstore and
property development businesses, respectively Shoppers Drug
Mart/Pharmaprix (Shoppers) and Genstar Development Company (Genstar),
will be undertaken with a view to realising in cash the fair value of
those assets, subject to completion of the Imasco transaction.
Following the sale of Shoppers and Genstar, British American Tobacco's
only business in Canada will be Imperial Tobacco, the leading Canadian
tobacco company with a 69 per cent market share.

British American Tobacco's base offer per share of C$40.00 is based on
its valuations of the businesses as follows:-


                                            Valuation C$ million
Imperial Tobacco                                   9,000
CT Financial Services (98.2 per cent interest)     7,850
Shoppers                                           2,100
Genstar                                              400
Borrowings and other items                        -1,700
Net valuation                                     17,650

Net valuation per share                           $40.00

British American Tobacco's basic offer price per Imasco share of C$40.00
will be increased dependent upon the outcome of the sale processes for
Shoppers and Genstar.  The cash offer price will be increased by the
amount by which the aggregated net consideration for each of Shoppers
and Genstar exceeds the minimum values shown above, divided by the
number of fully diluted Imasco shares in issue (approximately 441.1
million).  The net consideration will equal the sales prices for
Shoppers and Genstar, less selling costs and certain other adjustments,
such as for retained obligations.

The base price of C$40.00 per Imasco common share represents a 25 per
cent premium to Imasco's share price prior to the start of press speculation
about the possibility of British American Tobacco acquiring Imasco.

The valuation of Imperial Tobacco of C$9.0 billion (£3.7 billion)
represents an 11.0 times multiple of 1998 profit before interest and tax
of C$815 million (£335 million) and a price earnings ratio of 18.7 times
after deducting tax at an effective rate of 41 per cent (including the
Canadian surcharge on tobacco profits), but before deducting Imasco's
administration and other costs, which were C$61 million in 1998.

This premium value fully reflects the quality of the Imperial Tobacco
business, its position of leadership in Canada and its strong track
record.  British American Tobacco will establish whether there is
sufficient institutional demand for up to 20 per cent of the Canadian
subsidiary to be offered to Canadian shareholders based on the C$9.0 billion
value of Imperial Tobacco.

Completion of the transaction with Imasco is subject to a number of
conditions including:-

1. Approval of the transaction by the requisite majority of shareholders
of Imasco, other than British American Tobacco.

2. Receipt of advance tax rulings and other regulatory clearances.

3. Substantially contemporaneous completion of the British American
Tobacco/Imasco transaction and the sale by British American Tobacco to
TD Bank of Imasco's 98.2 per cent interest in CT Financial Services.

4. Approval of the transaction by a simple majority of British American
Tobacco shareholders at a meeting expected to be held in October.  R & R
Holdings S.A., the joint holding company for Rembrandt and Richemont's
interest in British American Tobacco, has irrevocably agreed to cast its
25 per cent voting interest in favour of the transaction.

The Board of Imasco has established an Independent Committee to consider
the proposed transaction and has engaged a financial adviser to value
Imasco.  The Independent Committee has determined that it is its
responsibility to facilitate a decision by Imasco's shareholders on the
transaction.  The Independent Committee will decide whether or not to
recommend approval when the outcome of the sales processes for Shoppers
and Genstar, and hence the final price of British American Tobacco's
offer for Imasco, is known and its adviser's valuation has been
received.

Documentation, including a valuation report by the adviser to the
Independent Committee, is expected to be sent to Imasco shareholders in
December, with the shareholder meeting of Imasco to be held in January
2000.  The requisite approval by Imasco's public shareholders will be
either a simple majority or a two-thirds majority of those present and
voting at the meeting, depending on whether the final price per share is
above the mid-point of the valuation range determined by the adviser to
the Independent Committee.

Under the agreement between Imasco and British American Tobacco, Imasco
has undertaken to call a shareholder meeting and perform certain other
steps to facilitate the transaction, irrespective of the Independent
Committee's recommendation.  The agreements between British American
Tobacco and Imasco and British American Tobacco and TD Bank may be
terminated by mutual agreement of the relevant parties and in certain
other limited circumstances.

Upon completion of the transactions with Imasco and TD Bank, British
American Tobacco's initial net cash outlay, including Imasco's existing
debts, is expected to be approximately C$4.1 billion (£1.7 billion),
funded from British American Tobacco's cash resources and borrowing
facilities.  Disposal proceeds from Shoppers and Genstar will reduce
this figure.

On the terms agreed, the transaction is expected to be marginally
earnings enhancing before goodwill amortisation.  Goodwill of
approximately C$5.0 billion (£2.1 billion) will arise from acquiring the
58 per cent holding.  British American Tobacco's shareholders funds will
be increased by approximately C$4 billion (£1.6 billion) in respect of
British American Tobacco's 42 per cent share of the surplus on revaluing
Imasco's non-tobacco businesses.

Martin Broughton, Chairman of British American Tobacco, said:  'As a
result of our decision in 1997 to focus our activities exclusively on
tobacco, we have been jointly considering means of restructuring Imasco
to reflect our strategy, while securing the interests of Imasco's public
shareholders and the future development of all its businesses.

'Our proposal provides the most efficient structure for ensuring that
the full realisable value of Imasco's business is passed through to
shareholders.  The transaction represents a further step in British
American Tobacco's strategy to become the world's leading international
tobacco company, allowing us to concentrate on our strength in managing
tobacco assets.

'Imperial Tobacco is an excellent business, with a proven management
team who have been able to increase market share consistently for the
past 20 years.  The business will continue to be based in Quebec, with
cigarettes being supplied from Imperial Tobacco's existing manufacturing
facilities.'

The Board of British American Tobacco is being advised by Goldman Sachs
and Nesbitt Burns.

An exchange rate of £1 = C$2.43 has been used throughout this press
release.

For further enquiries, please contact:

British American Tobacco
[phone]
Michael Prideaux
Ralph Edmondson
Denise Hart

Goldman Sachs
Toronto - Doug Guzman
[phone]
New York - Joe Gatto
[phone]
London - Anthony Bernbaum
[phone]

Nesbitt Burns
[phone]
Donald Johnson
Geoff Belsher
Boris Novansky
Mark McQueen

Hill & Knowlton
[phone]
Forbes West