Japan Tobacco (JT) has announced plans to acquire Vector Group, the fourth-largest tobacco company in the United States, in a transaction valued at approximately $2.4 billion. The deal, structured as an equity purchase, will see a JT-affiliated company launch a tender offer for Vector shares at $15 per share, aiming to take the company private.
Following the announcement, Vector’s stock rose by 5.8% in premarket trading, climbing from Tuesday’s closing price of $13.99. The acquisition has received unanimous backing from Vector’s board of directors and is slated for completion within JT’s current fiscal year, which ends on December 31. However, the deal remains contingent on obtaining the necessary antitrust approvals.
JT views this acquisition as a strategic move to bolster its return on investment in the combustible tobacco sector and further expand its global market presence. Despite these ambitions, the transaction will be closely watched by regulators, as consolidation in the tobacco industry often faces scrutiny due to competition concerns.
