TEMPO.CO, Jakarta - Japan Tobacco Inc. officially acquired all shares of Indonesian kretek makers PT Karyadibya Mahardhika and PT Surya Mustika Nusantara for Rp9 trillion.
The move was a part of Japan Tobacco’s strategy to expand its business in Indonesia, which was the world’s second-biggest after China with 316.1 billion sticks sold last year
“Including the pair’s debt, the value of the deal is US$1 billion,” Japan Tobacco said as quoted by Reuters on Friday, August 4, 2017.
PT Karyadibya Mahardhika is one of the largest kretek makers in Indonesia, which was established in 2017. Among the products are Apache, Absolute Mild, Absolute Mild Menthol Absolute Rubi, Minna International, Minna Barokah, Extreme Mild, Extreme Mild Menthol, and Bheta.
PT Surya Mustika Nusantara is a distributor of Apache and Extreme brands owned by PT Karyadibya Mahardhika.
The transaction will be completed in the October-December quarter 2017, pending regulatory clearance, Japan Tobacco said.
Kretek cigarettes, which are made of tobacco and the spice clove, dominate in Indonesia where Japan Tobacco mostly sells conventional cigarettes, the company said.
“This deal will give the JT Group immediate scale and presence on a nationwide level in the Indonesian kretek market,” Japan Tobacco said.
The announcement comes as Japan Tobacco has been trying to acquire tobacco businesses in emerging Asian markets. The company added that it is in talks to buy assets of Philippine cigarette maker Mighty Corp Ltd.
REUTERS | YOHANES PASKALIS PAE DALE