Integrate the scale. Protect the difference. How Imperial Brands uses M&A to transform its portfolio without standardising away what it buys

1. Introduction

For Imperial Brands, acquisitions are helping build scale in smoke-free products as consumer preferences and the nicotine category evolve. That has meant acquiring smaller entrepreneurial companies that have built brands, products or technologies which a large corporation might struggle to create in the same way internally.

The challenge starts after the deal. Imperial can provide distribution, capital, regulatory capabilities and scale. But too much integration risks destroying exactly the qualities that made the target attractive.

In conversation with M&A REVIEW UK, Julia Lefèvre, Corporate Development Director at Imperial Brands, explains why the best targets need to be identified long before they come to market, why the future organisation should be discussed before closing, and why successful integration requires an explicit decision not only about what to integrate, but also what to leave alone.

2. The Interview

This interview has been edited and condensed for clarity.

M&A REVIEW UK: Imperial operates in an industry undergoing substantial change. How does that shape your acquisition strategy?

Julia Lefèvre: The traditional tobacco business remains important, but the industry is transforming. So we need to think carefully about where future growth will come from.

A significant part of my acquisition focus is around next-generation nicotine products. Often, the businesses we look at are relatively small, entrepreneurial companies or start-ups that have developed a distinctive brand, product, technology or intellectual property.

These companies can sometimes create something in a much more unconstrained way than a large organisation can. They develop a particular tone of voice, understand a niche consumer group or innovate differently. If that works, we can bring capabilities that help take the business into its next stage of development.

M&A REVIEW UK: With many start-ups in an emerging category, do good targets come to you, or do you have to find them?

Lefèvre: We receive plenty of inbound opportunities, but the really attractive businesses are scarce. You cannot simply wait for them to come to market.

You need to identify them early and build relationships. Then, when an owner eventually decides to sell, you already know the business and they know you. That matters particularly in a competitive process because you can move faster.

And there may be many companies in a category, but that does not mean they are all attractive targets. You need to understand the intellectual property, product, people and whether there is genuine consumer traction. For me, network is absolutely key.

M&A REVIEW UK: Once you have found a successful entrepreneurial business, where does Imperial create additional value?

Lefèvre: Distribution is a good example. Take Black Buffalo in the US. The team had created a distinctive product and brand and taken the business a long way themselves. But scaling distribution and investing behind a brand across the United States requires significant resources.

That is where a larger organisation can add something different. We already have commercial infrastructure and a substantial sales force. We can use that to take a successful product much further.

Value flows in both directions. We give the acquired business access to scale and distribution, while it gives us a differentiated product and strengthens our portfolio.

The same applies internationally. With Helwit in Sweden, for example, expansion across additional countries creates regulatory and compliance requirements that become expensive for a smaller company very quickly. There can be a natural point where an entrepreneur says: we have built this successfully, but now we need a partner with a different kind of muscle.

So the logic is not: we bought it, therefore we need to change it. The question is: what have they built exceptionally well, and what can we add that they could not as easily provide themselves?

M&A REVIEW UK: That creates an obvious integration dilemma. How do you decide what to integrate, and what to protect?

Lefèvre: You have to be very clear about where the synergies actually are. If distribution is one of the reasons for doing the deal, then use the distribution capability. There may also be areas such as finance, regulatory or other back-office functions where integration makes sense and creates tangible value.

But then you need to distinguish those from the things genuinely unique to the company you acquired. That could be the operating model, how they speak to consumers or how they develop products and innovations.

Those are the things you need to protect.

The danger is coming in with perfectly good intentions and starting to standardise ways of working simply because that is how the larger organisation works. You can very quickly kill what you have just acquired.

M&A REVIEW UK: Large companies have powerful functions. How do you stop these functions from trying to shape the newest acquisition?

Lefèvre: You need clarity from the beginning, and that clarity has to exist at the highest level. When we acquire a company, we establish an integration team. But from the outset there needs to be a very clear line between what will be integrated and what will be left alone.

Once that direction has been agreed, functions can connect and exchange information without assuming that everything needs to become standardised.

Otherwise, every function naturally wants to get involved. As I sometimes say, every function will want to play with the shiniest toy you have, and the shiniest toy is usually the newest acquisition.

That is why discipline matters.

M&A REVIEW UK: So preserving autonomy is not just an attitude. You create organisational boundaries around it?

Lefèvre: Yes. Sometimes relatively small organisational choices create meaningful boundaries. Leaving an acquired company as a separate legal entity, or even retaining its existing email addresses, can reinforce the idea that it remains distinctive. The moment everybody is immediately inserted into the normal hierarchy, behaviours start to change.

More importantly, we communicate explicitly what happens where. Perhaps one area will be integrated within six months, another within twelve. Other areas may be clearly designated no touch.

No touch does not mean no interaction.

We might have excellent consumer insights that would benefit the acquired business. Of course we should share them. But sharing insight is very different from telling their team how they must speak to their consumers.

M&A REVIEW UK: At what point do you start discussing the future organisation with the target?

Lefèvre: Early in the acquisition process. I would not necessarily call it integration at that stage. I would call it developing the future together.

For many founders, selling the company is emotional. They have built something they are proud of and do not want to see it disappear.

So very early we discuss: Where would you fit within our portfolio? Why do we need you? Where is the complementarity? What can we bring? How could we scale your brand?

The acquisition should not feel like the end of the company. Ideally, it becomes phase two of its development.

But that conversation also requires honesty. If achieving the value case means difficult decisions, you need to put those cards on the table before Day 1. You do not want the founder or CEO discovering after closing what integration really means.

M&A REVIEW UK: You describe Corporate Development more as an enabler than as the owner of the acquisition logic.

Lefèvre: Corporate Development is a support function. I do not decide on my own what the company should acquire. The relevant category and market teams need to be involved and sponsor the project.

That matters because after the transaction I am not the person who will run the acquired company. They are.

Corporate Development can originate an opportunity, use its network and lead execution. But ultimately the business plan becomes their business plan.

The best situation is when a market or category comes to us and says: we see this opportunity; help us make it happen. Once we decide to pursue something, the people who will ultimately deliver the value need to be behind it.

M&A REVIEW UK: What should other acquirers take from your approach?

Lefèvre: First, build your network before you need it. The best businesses do not necessarily come looking for you.

Second, be open with founders and management about what you intend to do after the acquisition. That transparency builds trust and avoids difficult surprises later.

And third, make sure the business owns the acquisition logic. Corporate Development can originate and execute, but it cannot substitute for the people who eventually have to create the value.

For me, those things are closely connected: find the right opportunity early, develop a credible future together and make sure the people responsible for delivering that future genuinely believe in it.

Fact Box: Imperial Brands plc

Business: Global consumer company operating across tobacco and next-generation nicotine products

Headquarters: Bristol, UK

Listing: London Stock Exchange; FTSE 100

Founded: 1901

Employees: approximately 25,000 globally Imperial Brands Plc

Market presence: tobacco products sold in around 120 markets; smoke-free alternatives in more than 20 markets Imperial Brands Plc

FY2025 reported revenue: £32.2bn

FY2025 Tobacco & NGP net revenue: £8.316bn

FY2025 NGP net revenue: £369m, up 13.7% year-on-year

FY2025 Group adjusted operating profit: £3.988bn Imperial Brands Plc

Strategic direction: Imperial’s strategy to 2030 combines sustainable value creation in its combustible portfolio with building scale in next-generation products and a more consumer-centric, agile organisation. Imperial Brands Plc

Key Learnings:

• Integrate the source of scale – protect the source of difference. Distribution, regulatory expertise and back-office capabilities may be where the acquirer adds value; brand, consumer connection and entrepreneurial ways of working may be what should remain distinctive.

• “No touch” needs active governance. Senior leaders need to define explicitly what will be integrated and what will deliberately be left alone.

• Connection is not the same as integration. Sharing insight, expertise or market access does not require absorbing the target into the acquirer’s operating model.

• Design the future before Day 1. Founders need to understand both the opportunity and the difficult choices before closing.

• The business case must belong to the business. The managers who ultimately own the asset need to sponsor the value-creation logic.