Japan Tobacco said it will acquire Philipines’ second largest tobacco producer, Mighty Corp for USD936 million which will be its second large deal in Southeast Asia.
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. 1.
Mighty Corp is the second largest tobacco company with a 23% share of market in the Philippines, 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 the JT Group to consolidate its business foundation through expanded distribution and a strengthened brand portfolio, providing the JT Group 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. This major acquisition in South-East Asia adds to our recently announced full-scale entry into Indonesia, and will further enhance our business base in the region,” said Mutsuo Iwai, Executive Vice President and President of the Tobacco Business.
“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 CEO.