Japan Tobacco said today that it has offered to buy British rival Gallaher Group in a deal that could be the largest-ever acquisition by a Japanese firm worth at least $15 billion plus debt.
The Japanese company's announcement came after Gallaher said late yesterday evening that it was in talks on a friendly takeover worth 1,140 pence per share, or some £7.5 billion sterling, without naming the bidder.
'Our company has made an acquisition proposal to Gallaher and we are in negotiations,' Japan Tobacco confirmed in a statement, adding that it would announce the deal as soon as 'final procedures' are completed.
According to Japanese media, Japan Tobacco has agreed in principle to buy Gallaher for some $18.7 billion, including debt. This would be the largest-ever corporate purchase by a Japanese firm, topping Softbank Corp's acquisition of the local operations of British mobile telephone operator Vodafone for about $15.3 billion earlier this year.
A takeover would help Japan Tobacco to take on world number one Philip Morris of the US. Analysts were not ruling out a competing bid by number two player British American Tobacco or other rivals.
As well as its foothold in its home market and Western European countries, Gallaher, the world's fifth-largest tobacco company, has a strong presence in Russia and other former Soviet republics.
