JT Group to Acquire Vector Group Ltd.
Based on the agreement, the
Strategic rationale
In line with the JT Group’s tobacco business strategy, outlined in Business Plan 2024, this acquisition will add a growing and historically profitable business, which is expected to improve the Company’s Return-On-Investment (ROI) in combustibles. The transaction will significantly expand JT Group’s presence in the US, the second largest tobacco market in net sales and one of the most profitable globally. Furthermore, it is expected to strengthen the Group’s financial position through mid to long term hard currency profits and cash flows, which will support the Company’s investment strategy in Reduced-Risk Products, notably in heated tobacco sticks.
Executive comments
“We are excited by this acquisition which, in line with our tobacco business strategy, will contribute to the acceleration of the ROI in our combustible business and expand JT Group’s global footprint. By adding this sizeable and historically profitable business to our Company, we are confident the transaction will contribute to sustainable growth and increase JT Group’s corporate value,” said Masamichi Terabatake,
“This transaction will significantly increase our US presence, boosting our market share from 2.3% to approximately 8.0% and giving us full ownership of two of the top-10 US cigarette brands. The transaction will enable us to also strengthen our distribution network, and create mid to long term strategic opportunities to boost our competitiveness in this major tobacco market,” said
1. Overview of newly acquired company
|
Vector Group Ltd. |
|||
(1) Address |
|
|||
(2) Representative |
|
|||
(3) Business description |
Manufacturing and sales of cigarettes, etc. |
|||
(4) Capitalization |
|
|||
(5) Year of foundation |
1873 |
|||
(6) Major shareholder and holding ratio (As of |
BlackRock, Inc. (13.61%)
|
|||
(7) Relationship with JT |
Capital |
None |
||
Personnel |
None |
|||
Business |
None |
|||
(8) Financial results audited (Note1) |
||||
Accounting period (Dollars in Thousands) |
Fiscal year ended
|
Fiscal year ended
|
Fiscal year ended
|
|
Net assets |
(841,553) |
(807,877) |
(741,814) |
|
Total assets |
871,087 |
908,591 |
934,095 |
|
Net assets per share (Dollar) (Note2) |
(5.47) |
(5.22) |
(4.76) |
|
Net sales |
1,220,700 |
1,441,009 |
1,424,268 |
|
Operating profit |
320,439 |
339,010 |
328,035 |
|
Net income |
219,463 |
158,701 |
183,526 |
|
Net income per share (Dollar) (Note3) |
1.16 |
1.01 |
1.40 |
|
Dividend per share (Dollar) |
0.80 |
0.80 |
0.80 |
Note
1
: The results of operations and financial condition of the company are taken from the Form 10-K
filed by VGR with the
Note 2 : Net assets per share is calculated by dividing net assets by the number of common shares outstanding at the end of each period.
Note 3 : Diluted EPS is shown.
2. Overview of Tender Offer
Tender offeror |
|
(1) |
Vector Group Ltd. |
(2) Class of shares to be acquired |
Common stock (on a fully diluted basis) |
(3) Tender offer price |
|
(4) Period of tender offer (planned) |
From late August or early *The offer period under the tender offer will commence within the next 10 business days and is expected to expire 20 business days after commencement thereof, subject to receipt of antitrust approvals and satisfaction of customary closing conditions. If a situation arises whereby the conditions to the tender offer are not satisfied, the period of the tender offer may be extended, in accordance with the terms of the definitive agreement. |
(5) Conditions of tender offer |
The tender offer is subject to approval under |
Note 1: VGR is a listed company on the
Note 2:
3. Status of the number of shares and consideration for acquisition
Number of shares held by
|
None |
(1) Number of shares to be acquired |
157,486,267 shares |
(2) Acquisition price (estimated) |
The outstanding shares:
(approximately |
(3) Number of shares to be held
by |
157,486,267 shares (Ratio of voting rights: 100%) |
Note 1: The above figures are based on the assumption that all of VGR’s shares are acquired through the Tender Offer and a subsequent statutory merger.
Note 2: The acquisition price is converted at the rate of
4. Schedule
Agreement date |
|
(1) Period of Tender Offer (planned) |
From late August or early
|
(2) Stock transfer date (planned) |
By the end of the fiscal year ending |
5. Impact on Financial Performance
The transaction is not expected to have any material impact on the Group’s consolidated performance for the fiscal year ending
6. Notes
Important Information About the Tender Offer
The tender offer for the outstanding common stock of VGR has not yet commenced. This communication does not constitute a recommendation, an offer to purchase or a solicitation of an offer to sell VGR’s securities. An offer to purchase shares of VGR’s common stock will only be made pursuant to an Offer to Purchase and related tender offer materials. At the time the tender offer is commenced,
VGR’S STOCKHOLDERS ARE URGED TO READ THESE DOCUMENTS (INCLUDING THE OFFER TO PURCHASE AND RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER DOCUMENTS), AND THE SOLICITATION/RECOMMENDATION STATEMENT, AS MAY BE AMENDED FROM TIME TO TIME, CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT THEY SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SHARES OF COMMON STOCK.
The tender offer materials and the Solicitation/Recommendation Statement will be made available for free at the SEC’s website at www.sec.gov. Copies of the documents filed with the
Forward-Looking Statements
This announcement may include statements that are not statements of historical fact, or “forward-looking statements,” including with respect to the JT Group’s proposed acquisition of VGR. Such forward-looking statements include, but are not limited to, the ability of the
Risks and uncertainties include, but are not limited to, uncertainties as to the timing of the offer and the subsequent merger; uncertainties as to how many of VGR’s stockholders will tender their shares in the offer; the possibility that various conditions to the consummation of the offer and the merger contemplated by the merger agreement may not be satisfied or waived; the ability to obtain necessary regulatory approvals or to obtain them on acceptable terms or within expected timing; the effects of disruption from the transactions contemplated by the merger agreement and the impact of the announcement and pendency of the transactions on VGR’s business; the risk that stockholder litigation in connection with the offer or the merger may result in significant costs of defense, indemnification and liability; general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of COVID-19; the impact of tobacco industry regulation and tobacco legislation in
Neither the
###
Consumers, shareholders, employees, and society are the four stakeholder groups (4S) at the heart of all of
View source version on businesswire.com: https://www.businesswire.com/news/home/20240821063460/en/
Investor and Media Relations Division
For Investors
For Media
Yunosuke Miyata, Director: jt.media.relations@jt.com
Source: