(Adds executive, analyst comments, share activity)
By Martinne Geller
LONDON, May 6 (Reuters) - Britain's Imperial Tobacco Group reported a slight acceleration in revenue on Wednesdayas consumer spending picked up in some markets.
Shares of the company, whose brands include Davidoff andGauloises, were up 2.6 percent by 0847 GMT.
Underlying tobacco net revenue was flat in the six months to31 March, versus a 1 percent decline in the first quarter. Priceincreases, put through as lower gas prices were supportingconsumer spending, contributed 5 percent.
Imperial said it was on track to meet its targets for 2015,which include increasing its dividend by at least 10 percent.
"The second quarter accelerated a bit," said Morningstaranalyst Phil Gorham. "Pricing looks like it's sticking."
The company cited improvements in markets including Britain,Spain and France.
The number of cigarettes sold fell 5 percent in the firsthalf, with particular weakness in Iraq, due to geopoliticalinstability, and Vietnam, due to illicit trade.
Like all tobacco companies, Imperial faces falling sales aspeople cut back on smoking due to tighter budgets, tax increasesand growing health consciousness. The company expects priceincreases to offset volume declines in the second half of theyear.
Imperial also said it expects to close its $7.1 billionacquisition of certain U.S. brands in the second half of thisyear, pending U.S. antitrust approval of a related deal betweenReynolds American and Lorillard. It expects thatapproval this spring.
Imperial may be open to tweaking the terms of the deal ifrequired, though Chief Executive Alison Cooper does not think itwill be necessary.
"We have an agreed deal that we've already put in place withReynolds ...(we) still expect completion this spring," she toldreporters.
"Clearly around the edges there may be things that we'd lookat but I really don't expect any material change," she said.
In Imperial's home market, the United Kingdom, Cooper saidthe company was still considering whether to bring a lawsuitagainst the government over a law requiring "plain packaging" ofcigarettes.
Regarding this week's national election in Britain, Cooperdeclined to say which party she preferred. Another Imperialexecutive said the company was likely to raise prices if theLabour party succeeded in pushing through a new tobacco levy. (Reporting by Martinne Geller; editing by Jason Neely/ RuthPitchford)
