The JT Group has agreed to acquire Donskoy Tabak (DT) companies for RUB90 billion ($1.6 billion).
“This acquisition demonstrates our commitment to reinforce our number one position in Russia,” said Mutsuo Iwai, president of JT’s global tobacco business.
“For a number of years now this market has been a cornerstone of our group’s earnings growth. This transaction will increase our market share to approximately 40 percent and contribute to the group’s profit immediately, with synergies expected in the following years.”
Donskoy Tabak is the fourth largest tobacco company in Russia with a market share of approximately 7 percent. It has established brands such as Donskoy Tabak, Kiss and Play in the value segment, the largest and growing price segment in the country.
“Throughout 2017 we have restored our market share in Russia, driven by the success of our global flagship brands, Winston and LD. With DT’s value brands complementing our existing product portfolio and its strong salesforce expanding our distribution network, we will strengthen our overall competitiveness in the country,” said Eddy Pirard, JTI’s president and CEO.
The transaction is expected to be completed by the beginning of the third quarter of the fiscal year 2018 following regulatory clearance.