JT buys international rights to Natural American Spirit
The Japan Tobacco Group of companies (JT) has agreed to buy from Reynolds American Inc. (RAI) the international rights to the Natural American Spirit brand name and associated trademarks, along with the international companies that distribute and market the brands outside of the United States, for approximately $5 billion.
Since its launch in the U.S. in 1982 by Santa Fe Natural Tobacco Co., the Natural American Spirit brand has provided a unique product offering and established a special brand positioning as the only truly global “additive-free” premium cigarette, with a marketing theme that is environmentally conscious and socially progressive, according to JT.
The brand has enjoyed strong growth momentum in the U.S., Japan, Germany, Switzerland, Italy, Spain and the U.K., among other countries. Outside of the U.S., Japan accounts for the majority of Natural American Spirit’s sales volume.
“Natural American Spirit, which has a strong and international presence in a premium-priced category, will allow JT to further extend its brand portfolio,” said Mitsuomi Koizumi, president and CEO of JT. “This strong and unique brand equity combined with an energetic and experienced team of people will further strengthen our group’s business foundation.”
“Natural American Spirit has achieved excellent international growth over the past several years,” said Susan M. Cameron, RAI’s president and CEO. “When backed by the strengths of the JT Group’s international distribution, sales force and manufacturing capabilities, we believe that growth trajectory will not only continue, but accelerate,” she said.
Selling the international trademark rights to a company with an established global infrastructure was more advantageous to RAI than investing in an international infrastructure capable of supporting Natural American Spirit’s growth potential, Cameron added.
If approved by regulators, the Santa Fe deal would be JT’s biggest acquisition since its 2007 purchase of the Gallaher Group for $14.7 billion.
The transaction is expected to be completed by early 2016.
