RUSSIA
Japan Tobacco Inc. (JTI) announced mid-March 2018 that the group has agreed to acquire Donskoy Tabak (DT), reinforcing its leading position in Russia, the third largest tobacco market in the world.
The purchase price for the transaction is estimated at around RUB90 billion (US$1.6 billion).
“This acquisition demonstrates our commitment to reinforce our number one position in Russia,” said Mutsuo lwai, president of JTI’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% and contribute to the group’s profit immediately, with synergies expected in the following years.”
DT is the fourth largest tobacco company in Russia with a market share of approximately 7% and 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,” said Eddy Pirard, JTI’s president and c.e.o. “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.”
The transaction is expected to be completed by the beginning of the third quarter of the fiscal year 2018 following regulatory clearance.