Japan Tobacco has agreed to buy Donskoy Tabak, Russia’s fourth-largest cigarette maker, for $1.6 billion in a bid to reinforce its leading position in the country.
One of the world’s biggest tobacco companies, whose global brands include Winston and Camel, Japan Tobacco (JT) has set its sights on international markets to counter slowing sales at home and intensifying competition in the e-cigarette market.
JT on Friday said the deal would boost its Russian market share to about 40% from the current 33%, which was already the largest in the country.
The acquisition of Donskoy Tabak, whose brands include Donskoy Tabak, Kiss and Play, will be completed later this year, it said.
“This acquisition demonstrates our commitment to reinforce our number one position in Russia,” JT executive vice president Mutsuo Iwai said in a statement.
The deal will also include JT’s purchase of Greek cigarette maker SEKAP, it said, adding that it has no plan to revise its earnings forecast following the announcement.
Last year JT spent some $2 billion on acquiring major tobacco manufacturers in Asia, including Mighty of the Philippines.