Japan Tobacco Inc (JT) has announced that the JT Group has concluded an agreement to acquire all outstanding shares of Haggar Cigarette & Tobacco Factory Ltd (HCTF), with operations in the Republics of Sudan and South Sudan. The acquisition is expected to be completed in November 2011.
HCTF is the leading tobacco manufacturer in the Republic of Sudan with a market share of more than 80 per cent and a total volume of more than 4.5 billion cigarettes in 2010. Its success in this growing cigarette market is anchored on its best-selling brand, Bringi.
Fadoul Pekhazis, Regional President of Middle East, Near East, Africa, Turkey and Worldwide Duty Free, JT International (JTI), says, “This acquisition marks our confidence in the economic potential of both countries at this sensitive time of transition. JTI is excited about the opportunity to develop a strong business base in the Republics of Sudan and South Sudan, and is committed to working with all relevant local stakeholders in making this happen.”
Through this acquisition, the JT Group will further expand its geographic footprint and enhance its earnings base from developing markets. The group remains committed to strengthening JTI’s business foundations along with an overall strategy to foster growth in all markets with potential.
Total consideration is approximately $450 million, which values the transaction at 9.9 times HCTF’s 2010 underlying earnings before interest, tax, depreciation and amortisation. It is envisaged that the acquisition will be funded by a combination of the JT Group’s existing funds and loan facilities.