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Japan Tobacco to buy Philippine cigarette maker Mighty for $936 million
August 22, 2017 / 6:26 AM / 4 months ago

Japan Tobacco to buy Philippine cigarette maker Mighty for $936 million

TOKYO (Reuters) - Japan Tobacco Inc (2914.T) said on Tuesday it would buy the Philippines’ No. 2 cigarette maker Mighty Corp for about $936 million, its second large deal in Southeast Asia this month as it deepens its push into emerging markets.

FILE PHOTO: Japan Tobacco Inc (JT) headquarters building is seen in Tokyo, Japan, May 18, 2016. REUTERS/Toru Hanai/File Photo

The acquisition will help Japan Tobacco, which sells the Winston, Mevius and Camel brands in the Philippines, challenge the local dominance of PMFTC Inc, a venture owned by a Philip Morris International (PM.N) and unlisted Fortune Tobacco Corp.

Facing a shrinking smoking population at home, the world’s fourth-biggest cigarette maker this month announced it would buy an Indonesian maker of “kretek” tobacco and clove cigarettes, together with its distributor, for $677 million. Including debt, the deal was valued at around $1 billion.

    Japan Tobacco has said it is also looking for acquisitions in Africa and Latin America.

    The latest deal will help Mighty Corp pay unpaid taxes in the Philippines. The company was charged with avoiding 37.88 billion pesos in taxes, and offered to pay 25 billion pesos with funds from the sale, the Philippines’ Department of Finance said in July.

    The transaction is expected to be completed in the third quarter after regulatory approvals, Japan Tobacco said in a statement.

    (This version of the article corrects brand in paragraph 2 to Mevius from Mild Seven following rebranding)

    Reporting by Chang-Ran Kim and Ritsuko Ando; Editing by Edwina Gibbs

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