One of the five largest tobacco companies in the world, Japan Tobacco Inc. (JTI) has signed an agreement to acquire the tobacco business of Akij Group (Akij), the second largest tobacco company in Bangladesh with a cost of $1.476 billion (Tk 12,430 crore) on Monday.
JTI’s merger is one of the largest cross border acquisition transactions involving a Bangladeshi company.
With this investment, the company will continue to accelerate its expansion in emerging markets that matter, a key component of the Japan Tobacco Group’s growth strategy, JTI said in a press release issued from both Tokyo and Dhaka.
Japan Tobacco International has a track record of bringing world-class Japanese quality and innovation to the markets they enter through its established global brands, standards and practices as well as to the local heritage brands of the companies that they acquire in the countries where they invest.
Japan Tobacco International is in it for the long-term and are committed to the country by providing our international expertise and supply chain infrastructure well into the future.
Japan Tobacco International believes in the pursuit of excellence in everything that they do and this is nowhere more evident than in their commitment to employees.
“With this investment, we continue to accelerate our expansion in emerging markets that matter, a key component of the JT Group’s growth strategy. Akij’s substantial market share places us straight at the number two position in Bangladesh, which will expand our quality top-line growth. This transaction will also support our sustainable profit growth objectives in the mid- to long-term,” said Mutsuo Iwai, Executive Vice President and President of the Tobacco Business.
Akij holds about a 20 percent share of the cigarette market in Bangladesh, the eighth largest cigarette market in the world, with volumes exceeding 86 billion units and growing by about 2 percent year-on-year.
This transaction will add around 17 billion units to the JT Group’s overall volume. Akij currently occupies the number two position in both the value and base segments, together covering up to 90 percent of Bangladesh’s cigarette market, it said.
The transaction is expected to be completed in the third quarter of the fiscal year 2018 following regulatory clearance.