Japan Tobacco International Inc. on Thursday confirmed that it is in talks to acquire local cigarette manufacturer Mighty Corp.
“We can confirm that we have entered into exclusive talks with Mighty Corp. on the sale of its cigarette manufacturing and distribution business and assets,” JTI, the company behind global cigarette brands Winston, Camel, Benson & Hedges, Silk Cut, Sobranie and Mevius, said in a statement.
The confirmation came a day after Finance Secretary Carlos Dominguez III said in a statement that Mighty Corp. offered to settle P25 billion worth of tax liabilities with the government upon the completion of a P45-billion deal with JTI.
JTI did not give further details on the ongoing discussions with Mighty. “Until an agreement is signed, we are not in a position to comment any further,” JTI said.
Information on its Web site showed that JTI is the international tobacco division of Japan Tobacco, a leading international tobacco product manufacturer. The company is based in Geneva, Switzerland and sells its brands in 120 countries.
JTI was formed in 1999 when Japan Tobacco Inc. purchased, for $7.8 billion, the international tobacco operations of US multinational company R.J. Reynolds.
Dominguez said the government was studying the offer of Mighty to settle its tax liabilities amounting to P25, covering the deficiency excise taxes and internal revenue taxes of the company and its shareholders. Mighty is owned by the Wongchuking family.
Mighty president and director Oscar Barrientos, in a letter sent to BIR commissioner Caesar Dulay on July 10, 2017, said the settlement sum would be funded by means of an “interim loan” from JTI and the sale by Mighty and its affiliates of its manufacturing and distribution business and assets, along with the intellectual property rights associated with these assets, “including those owned by the company, Wong Chu King Holdings Inc., and other affiliates to JTI or any of its affiliates for a total purchase price of P45 billion exclusive of VAT.”