JAPAN Tobacco Inc.’s new chief executive favors pursuing deals in Southeast Asia and markets where it lacks a presence rather than a more complex deal, signaling a much-speculated tie-up with Imperial Brands Plc. is less likely.
Masamichi Terabatake, who took the helm of the world’s third-largest listed tobacco maker this month, said underdeveloped markets are more attractive than a “complicated” acquisition. He declined to comment directly on an Imperial acquisition during an interview on Wednesday in Tokyo.
“Speaking generally, there are fewer players in the market,” said the 52-year-old chief, who previously served as deputy CEO of the company’s international business. “Europe’s antitrust law makes a single purchase almost impossible.”
Shares of Imperial Brands slipped as much as 1.6 percent in early trading in London on Wednesday. Japan Tobacco rose 0.2 percent to ¥3,627 in Tokyo. The Japanese company’s stock lost 5.5 percent in 2017, compared with a 20-percent increase in the benchmark Topix index.
Terabatake also said Japan Tobacco is aiming to command around a 40-percent share of the heated tobacco market in Japan by 2020. A pillar of that growth will be its next-generation device, Ploom Tech, as well as other new devices the company has in development. He forecasts the heated tobacco market will comprise about a third of Japan’s overall tobacco market by 2020.