Japan Tobacco buying Philippine cigarette maker for $1bn

Japan Tobacco (JT) said Tuesday it would pay nearly $1 billion to buy Mighty Corp., the Philippines' number two cigarette firm, marking its second acquisition in Southeast Asia this month.

One of the world's biggest tobacco companies, whose global brands include Winston and Camel, JT has set its sights on international markets to counter slowing sales at home and intensifying competition in the e-cigarette market.

JT on Tuesday said it would pay 46.8 billion pesos ($936 million) for Mighty, which has a 23 percent share of the Philippine market.

It comes several weeks after announcing it was buying Indonesian cigarette maker PT Karyadibya Mahardhika and its distributor for $677 million.

"This major acquisition in Southeast Asia adds to our recently announced full-scale entry into Indonesia, and will further enhance our business base in the region," JT executive vice president Mutsuo Iwai said in a statement.

The deal will help Mighty settle a tax evasion case in which it is facing a 30 billion-peso payment.

The government had accused Mighty of using counterfeit cigarette tax stamps to get out of paying excise taxes.

The Philippine finance ministry has described the agreement as the country's biggest-ever tax settlement.

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Source: AFP