Japan: Japan Tobacco acquires stake in National Tobacco Enterprise Ethiopia
Japan Tobacco, the world’s third largest tobacco firm by market share, has announced that it has signed an agreement with the Ethiopian government to acquire 40% of the total shares in National Tobacco Enterprise Ethiopia, which has a monopoly in Ethiopia, for $510 million.
Japan Tobacco outbid a number of competitors in a tender process, including British American Tobacco, which is believed to have offer $230 million, according to an article in the Nikkei Asian Review.
Commenting on the move, Mutsuo Iwai, executive vice president and president of the tobacco business at Japan Tobacco said: “The JT Group is delighted to be entering the Ethiopian market where we currently have no presence. Ethiopia will be an important expansion of our geographic footprint in emerging markets. As the largest shareholder, we expect to be able to exert significant influence over the direction of the company. The country is currently experiencing double-digit economic growth, with industry volume also expected to continue to increase”.
Japan Tobacco’s latest move is a further attempt to reinforce its position in Africa and the Middle East. The firm purchased cigarette maker Haggar Cigarette & Tobacco Factory, which operates in Sudan and South Sudan, in 2011, followed by leading water pipe tobacco company Nakhla in Egypt in 2013 and cigarette maker Arian Tobacco Industry of Iran in 2015.
Source: Japan Tobacco / Nikkei Asian Review