Japan Tobacco Inc, the world's third-largest traded cigarette maker, bought 100 percent of Gallaher Group PLC, the maker of Benson and Hedges cigarettes in Europe, through a ?7.5 billion (US$15 billion) takeover bid.
The Tokyo-based maker of Camel cigarettes completed the acquisition, it said in a statement yesterday. Japan Tobacco is gaining the biggest share of the Russian market through the purchase. Gallaher had said it expected Japan Tobacco to conclude its takeover by April 18.
Tobacco companies are making acquisitions to move into emerging markets as western European governments crack down on smoking and to boost profit by reducing costs after expansion. Gallaher purchased Russia's biggest cigarette maker in 2000. Imperial Tobacco Group PLC, the producer of West cigarettes, offered 12 billion euros (US$16.3 billion) for Altadis SA this month.
Japan Tobacco said on Dec. 15 it aims to become bigger than British American Tobacco PLC, the industry's second-largest publicly traded company.
The acquisition of Gallaher will make the company the leader in the Russian cigarette market, Europe's biggest. Japan Tobacco expects the purchase to double its market share in the country to 34 percent. Altria Group Inc leads the Russian market, which consumes 370 billion cigarettes a year, according to Gallaher.
Gallaher's main brands include LD, one of the biggest tobacco labels in Russia, and Sovereign, the most popular cigarette in Kazakhstan. In the UK it sells Silk Cut and Mayfair cigarettes as well as Benson and Hedges.