Japan Tobacco Buys Hookah Tobacco Maker
Last week Japan Tobacco Inc., confirmed reaching agreement to acquire 100% of shares in two hookah tobacco companies based in Egypt, Al Nakhla Tobacco Company Free Zone S.A.E and Al Nakhla Tobacco Co, according to Reuters.
The Japan-based tobacco giant expects the acquisition to be finished by March, 2013 and refused to comment on the value of the deal, news agency said.
Al Nakhla hookah company is one of the global pioneers in the given category, accounting for 70 percent share of the market of the natural shisha molasses in Egypt, according to Japan Tobacco press release.
The Egyptian company sold 24,000 tons of hookah tobacco last year, with a total volume of $110 million.
Earlier this year JT acquired Gryson NV company, specializing in production of loose tobacco, paying $600 млн for the firm, in an attempt to strengthen its position on the European tobacco market. In 2011, the group also bought Haggar Cigarette & Tobacco Factory, the leading tobacco company in Sudan and South Sudan for $450 million.
In other good news for Japan Tobacco, its shares soared in Tokyo trade this week, after the Japanese government declared it decided to delay sale of its shares in the former tobacco monopoly.
Among the reasons for delaying the sale of a part of 50 percent stake in Japan Tobacco, were fluctuating market conditions and next month’s election, which might result in leadership change, according to a source in the ministry of finances. The tobacco giant’s shares ended at 6.53 percent higher on Monday at 2,411 yen.
The government has revealed plans to sell nearly 25 percent of its stake in JT this year, yearning revenues of not less than 500 billion yen (approximately $6.15 billion) in order to help funding budget for reconstruction needs after tremendous earth quake and tsunami which hit the company last March, a government official admitted.
However, a communications manager for Japan Tobacco, which sells such brands as Winston, Camel, Mild Seven and others, said the company still plans to repurchase the government’s stake.
“Our position has not changed and we are set to consider purchasing a part of shares in case the government decides to sell them.”
Last week Japan Prime Minister Yoshihiko Noda dismissed the lower house of parliament for the election scheduled for December, in a political move broadly anticipated to oust his center-left party from power.
In addition, the move to raise excise taxes on cigarettes in 2013 is pending, since stock markets have not been stable due to fears over a global economic downturn and debt crisis in European Union.
Japan Tobacco International is the third-largest tobacco group across the world by volumes, behind Philip Morris International and British American Tobacco. The group’s revenues for financial year 2012 were reported at $30 Billion Yen.