Unfortunately a very true and sad commentary on two well respected companies merging and creating a bit of a laughingstock in the industry. How long has dmn been in existence?and WHAT are their plans and future?
No one in the industry is expecting volume growth from China. There are lots of hopes that Chinese prosperity will generate a replacement of low quality demand with higher quality demand, and that this will benefit all the global dealers. China is already the largest producer and consumer of tobacco in the world, bigger than MO and B&W put together. Whether this will mean higher average margins for the dealers is an open question, but it may mean that a higher % of global tobacco volume is within the traded market, which would help the dealers.
Where is the brave Zulu nation now- just about extinct! I like the sentiment, but your heart is ruling your head. I worry about Dimon being able to maintain the dividend and even whether they can survive a down turn in their market. It would be interesting to see where the Dimon intangible assets relate to- Zimbabwean goodwill on the acquisition of Intabex sounds just the ticket- Tanzania is another long term growth play- European tobacco processing- no fear that the EU will withdraw the subsidies that keep this business alive- European price fixing investigation- just a slap on the wrist mate!!! These guys are going to have to write down most of their capital investments to nothing in the next 10 years, and refocus on Brazil, Asia and Africa. Has Dimon got the financial strength to re-invent itself? If it survives, it can make the grade.
I will be a buyer when I see Dimon owning up to what it knows it has to face, and after I have seen the market reaction- until then, I prefer to be on the touch line.