TOKYO • Japan Tobacco Inc agreed to buy a Bangladeshi cigarette maker for 124.3 billion taka (RM6.12 billion), taking its acquisition strategy to one of the fastest-growing economies in Asia.
The Japanese company is acquiring the tobacco business of Akij Group, the second-largest cigarette maker in Bangladesh, with about 20% share of the market, Japan Tobacco said in a statement yesterday.
“With this investment, we continue to accelerate our expansion in emerging markets (EMs) that matter,” Mutsuo Iwai, Japan Tobacco executive VP, said in the statement. “Akij’s substantial market share places us straight at the No 2 position in Bangladesh.”
The maker of Mevius and Winston cigarettes has been buying up businesses in markets where smoking is more prevalent, which has helped cushion sales in the face of tighter smoking regulations in most areas around the globe and dwindling demand at home. The Tokyo-based company has spent more than US$3 billion (RM12.24 billion) since last August picking up companies in Russia, Indonesia and the Philippines.
While Japan Tobacco is also investing in new products, announcing last week it will spend more in smokeless devices, it’s also betting EMs will take longer to implement tobacco restrictions, providing opportunities for growth.
The deal is expected to close in the third quarter, and Japan Tobacco said it doesn’t expect it to impact its earnings for current fiscal year.