The JT Group had signed an agreement to acquire the tobacco business of Akij Group (Akij), the second largest tobacco company in Bangladesh.
JT said the purchase price was estimated at about BDT124.3 billion ($1,476 million).
“With this investment, we continue to accelerate our expansion in emerging markets that matter, a key component of the JT Group’s growth strategy,” said Mutsuo Iwai, executive vice president and president of the Tobacco Business. “Akij’s substantial market share places us straight at the number two position in Bangladesh, which will expand our quality top-line growth. This transaction will also support our sustainable profit growth objectives in the mid- to long-term.”
JT said that Akij held about a 20 percent share of the cigarette market in Bangladesh, the eighth largest cigarette market in the world with annual volumes exceeding 86 billion units and volume growth of about two percent year-on-year.
“This transaction will add around 17 billion units to the JT Group’s overall volume,” JT said in a note posted on its website. “Akij currently occupies the number two position in both the value and base segments, together covering up to 90 percent of Bangladesh’s cigarette market, with brands such as Navy and Sheikh respectively.”
“Bangladesh is one of the fastest-growing economies in the world with a pro-business mindset, which is why we are keen to expand our presence in the country,” said Eddy Pirard, Japan Tobacco International’s president and CEO.
“The tobacco business of Akij is profitable, has state-of-the-art manufacturing facilities and a strong distribution network and workforce. With our strong track record of integration, we can accelerate operational efficiencies and introduce some of our Global Flagship Brands alongside Akij’s well-established portfolio.”
JT said the transaction was expected to be completed during the third quarter of the fiscal year 2018 following regulatory clearance.
JT in another acquisition
