UPDATE 3-BAT buys Scandinavian Cigarettes as earnings rise

British American Tobacco, the world's second-biggest cigarette maker, struck its second deal in a week with the purchase of Skandinavisk Tobakskompagni's (ST) Cigarettes for 2 billion pounds ($4 billion) as it beat forecasts with an 11 percent rise in 2007 earnings.

British American Tobacco, the world's second-biggest cigarette maker, struck its second deal in a week with the purchase of Skandinavisk Tobakskompagni's (ST) Cigarettes for 2 billion pounds ($4 billion) as it beat forecasts with an 11 percent rise in 2007 earnings. London-based BAT (BATS.L: Quote, Profile, Research) said on Thursday it also planned to cut global costs by 800 million pounds over the five years to 2012, which is More than most analysts had expected, helping boost BAT shares 4 percent to 20.15 pounds before falling back with the market to trade off 0.7 percent at 19.26 by 1345 GMT. BAT, which agreed to buy Turkey's state-owned cigarette maker Tekel last Friday, is buying 100 percent of the cigarette assets of privately-owned Denmark-based ST with snus and roll-your-own tobacco in an immediately earnings-enhancing deal. "Good news comes in threes," said analyst Erik Bloomquist at JP Morgan, as the results were above forecasts, BAT planned big cost savings and the ST deal was immediately earnings accretive. BAT, the company behind such brands as Kent, Dunhill, Lucky Strike and Pall Mall, said its Finance Director Paul Rayner, 53, will retire in April for personal reasons and be replaced by Ben Stevens, 47, BAT's regional director for Europe.

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