PHILIPPINES
Japan Tobacco Inc. announced that the JT Group has signed agreements to acquire assets related to the tobacco business of Mighty Corporation (MC) for a total of PHP 46.8 billion (approximately US$936 million).
The assets include MC’s distribution network, manufacturing equipment, inventories, and intellectual property. The transaction is expected to be completed in the third quarter of this year following regulatory clearances.
MC is the second largest tobacco company in the Philippines and has a 23% market share. (The Philippines is the 10th largest tobacco market in the world.)
MC holds a leading position in the value segment, which accounts for more than 50% of the industry volume, with strong local brands such as Mighty and Marvels. Its established distribution network reaches outlets nationwide.
The JT Group has been in the market for an extended period of time and increasing its presence mainly driven by Winston, a sub-premium product, notably in the urban areas of the Philippines.
The transaction enables JT Group to consolidate its business foundation through expanded distribution and a strengthened brand portfolio, providing with more than a quarter of market share in a country with robust economic growth.
“This transaction is another example of our geographic expansion for sustainable growth in the mid- to long-term,” said Mutsuo Iwai, executive vice president and president of the tobacco business. “This major acquisition in southeast Asia adds to our recently announced full-scale entry into Indonesia, and will further enhance our business base in the region.”
“I am confident that this acquisition will enable our continued expansion in the market and will allow us to leverage MC’s unique brands and their nationwide distribution network in the very near future,” said Eddy Pirard, JTI’s president and c.e.o.