Japan Tobacco declared on Tuesday that it will be paying Yen600 billion ($5 billion) to get rights to the Natural American Spirit brand of smokes outside the US from Reynolds American, the latest measure by the Tokyo-based firm to grow beyond the shrinking Japanese marketplace. Natural American Spirit also marketed itself as a socially progressive and environmentally conscious company, and has expanded across the United Kingdom, Spain, Italy, Switzerland, Germany, Japan, and the US. The Natural American Spirit acquisition will add about 280 employees, mainly in Europe and Asia, to the buyer’s 26,000-strong workforce.
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Once the transaction is complete, the worldwide rights to all of RAI’s operating companies’ cigarette trademarks will be owned by global tobacco companies. Natural American Spirit products are made with 100 per cent additive-free tobacco and include thirteen cigarette styles and four roll-your-own styles. According to the JT Group press release, the current operations of these subsidiaries will not be changed. The sale awaits regulatory approvals in a number of countries. “This strong and unique brand equity combined with an energetic and experienced team of people will further strengthen our Group’s business foundation”, said Mitsuomi Koizumi, President and Chief Executive Officer of the JT Group.
With brands including Winston, Camel and Mevius, JT wants to eventually become the world’s biggest cigarette maker, overtaking first and second-ranked Philip Morris worldwide and British American Tobacco.
Elsewhere chip designer Arm is 35p lower at 905p after analysts at Natixis cut their rating from buy to neutral and their price target from £12.50 to £10.
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Reynolds American shares ticked up 1.00% to close at $43.42 on Monday.
