JT eyes Ethiopia

Japan Tobacco has offered $510 million to buy a stake in Ethiopia’s National Tobacco Enterprise (NTE), reports Bloomberg. The offer was more than double the next-highest bid by British American Tobacco, according to a spokesman for the Public Enterprises Ministry.

A decision is expected in the “coming weeks” followed by 120 days to negotiate, according to Eva Hoeffelman, JT’s media relations director.

The company’s bid is in line with its strategy of building up a presence in Africa and other emerging markets, she told Bloomberg on Monday.

NTE is the only company allowed to trade, manufacture or sell tobacco products in Ethiopia, which is home to about 100 million people. It owns a factory in the capital, Addis Ababa, and four farms, according to its website.

In 2012, only 9 percent of Ethiopian men smoked, the lowest proportion in the world, according to World Bank data. A smoking ban in public places is being implemented in Ethiopia after legislation was passed in 2014, which could impact local tobacco sales.

NTE recorded sales of $17.4 million in the third quarter of the fiscal year that ended July 7, 2015. The government reportedly owns 71 percent of the company and Yemeni-owned Sheba Investment Group is the other major shareholder.