Japan Tobacco Inc. is set to invest $1.47 billion to acquire United Dhaka Tobacco business, a subsidiary of Akij Group, the single biggest FDI in Bangladesh. United Dhaka Tobacco Company Limited holds about 20 percent market share of Bangladesh’s cigarette market only behind British American Tobacco.
$1.09 billion will be utilized to buy shares of Dhaka Tobacco and $386 million will be set aside for trademarks and design rights. The company has been manufacturing and distributing Japan Tobacco’s Winston brand and Philip Morris’s Marlboro brand for the past three years.
According to Kazi M Aminul Islam, executive chairman of Bangladesh Investment Development Authority:
“This is the biggest FDI in the private sector.”
Japan Tobacco has been acquiring companies in Russia, Indonesia and the Philippines in the past twelve months which are all among the top ten tobacco markets in the world.
Bangladesh is the eighth largest cigarette market in the world with 2 percent growth every year and volumes exceeding 86 billion units.
Mutsuo Iwai, executive vice-president and president of the Tobacco Business commented the following:
“With this investment, we continue to accelerate our expansion in emerging markets that matter.”
Expected to close in the third quarter of 2018, the transaction is subject to regulatory approval.
Eddy Pirard, president and chief executive of Japan Tobacco International added:
“Bangladesh is one of the fastest growing economies in the world with a pro-business mindset, which is why we are keen to expand our presence in the country with our strong track record of integration, we can accelerate operational efficiencies and introduce some of our global flagship brands alongside Akij’s well-established portfolio.”
About Japan Tobacco Company
Founded in 1898, Japan Tobacco Inc. manufactures and sells tobacco products, prescription drugs, and processed foods in Japan.. Headquartered in Japan, Japan Tobacco operates through four segments: Domestic Tobacco, International Tobacco, Pharmaceutical, and Processed Food business. Employing 39000 employees , Japan Tobacco sells its tobacco products in approximately 130 counties.
About Akij Group
Founded in 1950, Akij Group is an industrial conglomerate that operates in food, textile, cement, plastics, printing, steel, and shipping industries and also operates in manufacturing yarn, jute, cement, tiles, plastics products, panel boards, poly fibers snacks, beverages, tobacco, and flour. Headquartered in Dhaka, Bangladesh, Akij Group owns United Dhaka Tobacco Company.