Japan Tobacco Looks To Expand Russia Presence With Donskoy Tabac Purchase
Japan Tobacco International has announced the purchase of Russia-based Donskoy Tabak, which the group says helps reinforce its position in the third-largest tobacco market in the world.
The deal is valued at RUB 90 billion, or €1.33 billion.
“This acquisition demonstrates our commitment to reinforce our position in Russia," said Mutsuo Iwai, global tobacco president at Japan Tobacco.
"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."
Donskoy Tabak is the fourth largest tobacco company in Russia, holding a market share of approximately 7%. The business includes brands such as Donskoy Tabak and Kiss and Play in the value segment, the largest price segment in the country.
Eddy Pirard, JTI’s President and CEO added that the value brands in Donskoy Tabak's portfolio complement JTI's brands Winston and LD.
“With Donskoy Tabak'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,” said Eddy Pirard, JTI’s President and CEO.
The transaction is expected to be completed by the beginning of the third quarter of the fiscal year 2018, following regulatory clearance.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine