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Japan Tobacco in talks to buy assets of Philippines' Mighty Corp for $890 mln
July 12, 2017 / 11:34 AM / 5 months ago

Japan Tobacco in talks to buy assets of Philippines' Mighty Corp for $890 mln

MANILA, July 12 (Reuters) - Japan Tobacco Inc is in talks over a 45 billion peso ($890 million) deal to buy the assets of a Philippines cigarette maker accused of evading billions of pesos in taxes, the world’s third-biggest tobacco company said on Wednesday.

Mighty Corp has offered to pay the Philippines government 25 billion pesos this month and will fund the tax settlement with a 45 billion peso sale of its assets to JT International Philippines, a local subsidiary of Japan Tobacco, the Philippines’ Department of Finance said in a statement, quoting a letter from Mighty President Oscar Barrientos.

A Japan Tobacco spokeswoman in Tokyo confirmed that the company is in talks with Mighty to buy its manufacturing and distribution assets but declined further comment.

Officials at Mighty, the second-largest tobacco company in the Philippines, were not immediately available for comment.

Mighty has been charged with avoiding 37.88 billion pesos in tax payments.

In May Japan Tobacco said it was looking for mergers and acquisitions in emerging markets such as Southeast Asia, Africa and Latin America.

The potential acquisition by Japan Tobacco, which sells the Winston, Mild Seven and Camel brands in the Philippines, would help it to challenge the dominance of PMFTC Inc, a joint venture of the Philippines unit of Philip Morris International and unlisted Fortune Tobacco Corp, in the Southeast Asian country’s cigarette market. ($1 = 50.5840 Philippine pesos)

Reporting by Neil Jerome Morales in Manila and Taiga Uranaka in Tokyo; Editing by David Goodman

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