Photo/Illutration People enjoy the aromas of various smoking-related products. (Asahi Shimbun file photo)

Japan Tobacco Inc. (JT) will acquire U.S. tobacco giant Vector Group Ltd. (VGR) for 378 billion yen ($2.6 billion) in a major overseas expansion, the company announced Aug. 21. 

According to the announcement, VGR currently holds a 5.5 percent share, or the fourth largest, in the U.S. cigarette market.

JT will boost its share to 8 percent of the U.S. market by acquiring VGR and will gain two tobacco brands that are among the top 10 selling in the country.

VGR has agreed to the acquisition and JT aims to make it a wholly owned subsidiary by making a public tender offer for its shares.

The acquisition is scheduled to be completed within this fiscal year.

VGR, which is headquartered in Florida, has a long history since its founding in 1873.

The company manufactures and markets cigarettes and deals in discount tobacco products.

The company reported sales for the fiscal year ending in December 2023 of approximately $1.4 billion and net profits of about $180 million.

JT has been recently acquiring overseas cigarette companies, including purchasing the British tobacco giant Gallaher Group for more than $13.8 billion in 2007.

Its latest acquisition will be the fourth largest for JT.

Prior to that, JT's most recent merger and acquisition was buying Bangladeshi Akij Group's tobacco business for 164.5 billion yen in 2018.

Related News