Japan Tobacco close to deal to acquire SantaFe Natural Tobacco from Reynolds for about USD 5bn
Japan Tobacco [TYO:2914] is close to an agreement to acquire New Mexico-based Santa Fe Natural Tobacco, a subsidiary of Reynolds American [NYSE:RAI], for about USD 5bn (JPY 600bn), the Nihon Keizai Shimbun reported.
The Japanese-language report disclosed, without citing any sources, that the two companies are seeking to reach a deal during this week. It would be the largest overseas M&A deal by Japan Tobacco since it acquired UK-based Gallaher in 2007 for USD 14.7bn, the report said.
Santa Fe Natural Tobacco manufactures the Natural American Spirit brand, which is sold in the US, Europe and Japan, the report said, adding that by obtaining the sales rights to the brand Japan Tobacco aims to accelerate global growth. There is a possibility, however, that the rights to sell the brand within the US may not be included in the deal, the report added.
Santa Fe Natural Tobacco had net sales for 2014 of USD 658m, the report said.
Nihon Keizai Shimbun