It is official–Imperial Brands is out of the premium cigar industry. This morning, it was was announced that Imperial Brands has sold its premium cigar business for 1.23 billion euros ($1.33 billion). Profits from the sale will be used to pay down debts.

Imperial Brands announced back in April 2019 that it had plans to sell off its worldwide premium cigar business [read more here]. According to MarketWatch, Allied Cigar Corporation, S.L. has agreed to pay 1.04 billion euros for Imperial’s Premium Cigar RoW (Rest of World) assets; Gemstone Investment Holding, Ltd. will pay 185 million euros for Imperial Brands’ Premium Cigar USA division. Gemstone Investment Holdings will acquire Altadis USA, JR Cigar, cigar.com, the Casa de Montecristo franchise and Serious Cigars. Allied Cigar Corp will acquire Imperial’s 50 percent stake in Habanos S.A. and its non-Cuban premium cigar facilities and assets including Flor de Copan and VegaFina. Both transactions are expected to close in the third quarter of 2020 following regulatory clearances. Imperial will keep its machine-made cigar business and brands such as Backwoods.

Imperial Brands has plans to use the profits from the sale to pay down 12 billion pounds of debt and invest in new vaping products. This comes as the tobacco industry continues to see a decline in traditional combustible tobacco products and consumers seek out alternatives. According to a report from Reuters, Imperial’s premium cigar business generated sales of over 300 million pounds and 80 million pounds in profit before tax in the year to September 2019. After taxes and other costs, net cash proceeds from he sale is expected to amount to about 1.09 billion euros.