ST CIGAR GROUP HAS ACQUIRED CAO INTERNATIONAL

Scandinavian Tobacco (ST) and CAO International are pleased to announce that ST Cigar Group Holding B.V. (STCG) has acquired CAO International as per 1st January 2007.

STCG is one of the largest cigar companies in the world. With its headquarters in The Netherlands STCG consists of a number of subsidiary companies of which Henri Wintermans is the most well known. STCG owns the world’s best selling small cigar, Café Crème, as well as other international brands such as Canada’s main brand Colts, Henri Wintermans and Nobel Petit.

CAO International, based in Nashville, USA, is a relatively young cigar company. CAO International has rapidly grown into a major player in the premium handmade market segment in the USA. CAO International was founded by Cano Ozgener and the brand has been an outstanding success with cigar connoisseurs for its superb quality, combined with setting new and innovative standards in the industry.

“It is an important step that CAO becomes a member of ST”, says Rob Zwarts, Chief Executive Officer of STCG.

“This is not only an ideal way to enter the large and growing US cigar market, but CAO will also act as a platform to further grow our business in the USA with additional concepts and brands. In that respect it is of great value that both Tim and Aylin Ozgener have decided to continue to be active in key functions of the company”.

Founder Cano Ozgener states that he welcomes ST Cigar Group's expertise, resources and plans to grow the company further in the USA, and additionally that the CAO brands will now get access to an international network of first class marketing and sales organisations.

“We also feel very privileged to be able to continue the special relationship we have with our current suppliers whom we have always worked with as a real team”, says Cano Ozgener.

Gary Hyams has been appointed Chairman of CAO International, having previously been Managing Director of Henri Wintermans’ UK based company, Loretta Cigars. Tim Ozgener will continue to serve as President of the company.

For further enquiries please contact:

Frans van Rijsingen, Corporate Affairs Manager

ST Cigar Group Holding B.V., Eersel, The Netherlands

(Tel. +31 (0)6 51237409, e-mail: f.vanrijsingen@henriwintermans.comf.vanrijsingen@henriwintermans.com

or Gary Hyams, Chairman of CAO International, Nashville, USA

(Tel.: +1 615 352 0587)

or ST’s Information Department

+45 39 55 63 15