Japan Tobacco Inc announced that it has signed an agreement to acquire the tobacco business of Akij Group, the second largest tobacco company in Bangladesh, to further increasing its presence in Asia.
The purchase price for the transaction is estimated at around Tk 124.3 billion ($1.5 million), says a press release issued on Monday.
“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,” it quoted Mutsuo Iwai, executive vice president and president of the Tobacco Business.
Akij holds about a 20 percent share of Bangladeshi tobacco market, the eighth largest 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 tobacco market, with brands like Navy and Sheikh.
JT Group acquires the shares of United Dhaka Tobacco Company Limited, the entity taking over the tobacco business assets of Akij, as well as all tobacco related trademarks and design rights from Akij.