LONDON, April 22, 2026, 17:15 BST
British American Tobacco p.l.c. set up the next leg of its share buyback programme on Wednesday, naming Merrill Lynch International to repurchase ordinary shares from April 23 through June 29, even as UK lawmakers approved tighter rules that will bar today’s under-18s from ever legally buying cigarettes.
The timing matters. BAT is pressing on with cash returns while its core cigarette business faces a harder regulatory path in its home market and while investors look for proof that Vuse vapes, Velo nicotine pouches and other non-cigarette products can carry more of the load.
The company said shares bought under the programme will be cancelled, a move that reduces the number of shares in issue and can lift earnings per share if profits hold. Merrill Lynch will make trading decisions independently of BAT, and the company said it will move from daily buyback notices to weekly consolidated announcements under changed UK listing rules.
BAT shares closed up 0.8% at 4,143 pence in London on Wednesday, after falling 2.7% on Tuesday. The stock remains below its April highs but has still drawn support from its dividend and buyback profile.
The buyback is part of a wider £1.3 billion repurchase plan for 2026. BAT said in February it had raised its dividend by 2% to 245.04 pence and expected 2026 performance at the lower end of its medium-term target range, with leverage expected to fall within its 2.0 to 2.5 times target by year-end.
The political backdrop shifted again on Wednesday. Britain’s Tobacco and Vapes Bill raises the legal age for buying tobacco by one year every year for people born on or after Jan. 1, 2009. It also tightens controls on vaping and nicotine products, including limits on advertising, displays, free distribution and discounting.
Health Secretary Wes Streeting called the vote “a historic moment” and said children in the UK would be part of the first smoke-free generation. The measure still awaits royal assent, which Reuters reported is due next week. Reuters
BAT has been trying to recast itself as a broader nicotine group rather than just a cigarette company. Chair Luc Jobin told shareholders last week that consumers choosing BAT’s smokeless products rose more than 15% year on year in 2025, moving the group closer to its target of 50 million smokeless consumers by 2030.
Management is also changing. Dragos Constantinescu, a former BAT executive now at Asahi Europe & International, will become chief financial officer on Sept. 1. Chief Executive Tadeu Marroco said Constantinescu’s “strong understanding of BAT” would be an asset as the company focuses on growth and cash returns. BAT
The competitive picture is mixed. Philip Morris International cut its annual profit forecast on Wednesday, citing uncertainty around its Zyn nicotine pouches and tougher competition. Jefferies analyst Andrei Andon-Ionita wrote that Velo would be the “likely beneficiary” of weaker Zyn shipment momentum. Reuters
Imperial Brands, another UK-listed tobacco group, warned last week of market share losses in its five biggest markets and said it would put profitability ahead of volumes. Reuters said Imperial typically undercuts BAT and Philip Morris on pricing, while its larger rivals lean more on premium brands and innovation spending.
But the downside case is plain. A buyback can shrink the share count, but it cannot remove regulatory risk. If tighter UK rules, U.S. authorisation delays for nicotine products, or pressure from illicit and low-priced vapes slow the shift into alternatives, BAT may need more than capital returns to keep investors onside.
