As part of the deal, Japan Tobacco which owns the Camel and Amber Leaf cigarette brands in the UK, will offload its shares in its subsidiaries Japan Beverage Holdings and JT A-Star to Suntory. The sale will also include the transfer of the Roots and Momono Tennensui drinks brands.
The deal comes after an earlier announcement in February by Japan Tobacco stating its intention to withdraw from the manufacture and sale of beverage products. It had originally set a target for the divestiture at the end of September, however, Suntory president Takeshi Niinami expressed interest in an deal shortly after the statement.
Suntory has set out a basic policy to maintain the current business models of Japan Beverage Holdings and JT A-Star, which are considered highly competitive in the market, with good brand loyalty. The firm intends to utilise its well established position in the beverage market to leverage the brands further.
Japan Beverage Holdings managed full-year net sales of £641m in 2014, while net sales at the smaller JT A-Star topped £24m. Finalisation of the deal is expected in July after regulatory review.
Sale of the business would increase Japan Tobacco’s net profit for the year ending December by ¥100bn, it said.