Japan Tobacco (JT) and Philip Morris International (PMI) in separate announcements said they bought 20 per cent stakes in the company distributing their products in Russia.

JT terms are identical to those of PMI; USD 750 million (EUR 553 million) for the stake, coupled with USD 100 million in incentive payments based on performance. The tobacco companies said they purchased stakes in Megapolis Distribution, registered in the Netherlands, which is the holding company of Moscow-based distributor CJSC TK Megapolis.
“Megapolis has been our partner since 2007 and has contributed to JTI’s success in the important Russian market”, said Japan Tobacco International’s Kevin Tomlinson, regional president. “This acquisition will strengthen their distribution platform, allowing us to implement our growth strategy in the region more effectively.”
At PMI, Miroslaw Zielinski, the president responsible for Eastern Europe, said the agreement will support PMI business expansion and pave the way for infrastructure expansion. Megapolis handles about 70 per cent of the cigarettes sold in Russia and has distribution agreements with PMI, JT International and Imperial Tobacco.