Japan Tobacco, instant noodle pioneer team up
Friday, 23 November 2007
TOKYO, Nov 22 (AFP): Japan Tobacco and instant noodle pioneer Nissin said today they would jointly operate a frozen food company in a billion-dollar buyout and may enter a capital tie-up in the future.
Japan Tobacco Inc., striving to diversify as smoking declines, will launch a 109.2-billion-yen (one-billion-dollar) friendly bid to acquire all shares in frozen food manufacturer Katokichi Co. Ltd.
Nissin Food Products Co. Ltd., which started a global craze when it invented instant ramen noodles five decades ago, will in turn buy 49 per cent of Katokichi shares from Japan Tobacco and jointly operate the frozen food maker.
The two companies will then transfer their own frozen food businesses to Katokichi by April 2008, which would make it Japan's biggest frozen food manufacturer with annual sales of 260 billion yen.
"The food industry now faces major challenges due to the falling birthrate and rising prices of grain and vegetable oils," Nissin Food president Koki Ando told a press conference with Japan Tobacco (JT) and Katokichi.
The partners did not rule out strengthening their alliance in the future.
The consolidation with Katokichi will boost JT's annual food sales to over 600 billion yen, bigger than major food processing firms such as soy sauce maker Kikkoman Corp. which has sales of some 390 billion yen.
Japan Tobacco has been looking for ways to expand as Japan's population is rapidly ageing and smoking less.
It recently bought British rival Gallaher for 2.25 trillion yen in the biggest-ever foreign acquisition by a Japanese firm.
Japan Tobacco posted revenue of 286.5 billion yen from its food business in the last fiscal year to March 2007, which accounted for just six per cent of its annual sales.
Katokichi, a major frozen food maker established in 1956 and based in southwestern province of Kagawa, has been struggling to recover from one of Japan's growing number of food safety scandals.
Japan Tobacco Inc., striving to diversify as smoking declines, will launch a 109.2-billion-yen (one-billion-dollar) friendly bid to acquire all shares in frozen food manufacturer Katokichi Co. Ltd.
Nissin Food Products Co. Ltd., which started a global craze when it invented instant ramen noodles five decades ago, will in turn buy 49 per cent of Katokichi shares from Japan Tobacco and jointly operate the frozen food maker.
The two companies will then transfer their own frozen food businesses to Katokichi by April 2008, which would make it Japan's biggest frozen food manufacturer with annual sales of 260 billion yen.
"The food industry now faces major challenges due to the falling birthrate and rising prices of grain and vegetable oils," Nissin Food president Koki Ando told a press conference with Japan Tobacco (JT) and Katokichi.
The partners did not rule out strengthening their alliance in the future.
The consolidation with Katokichi will boost JT's annual food sales to over 600 billion yen, bigger than major food processing firms such as soy sauce maker Kikkoman Corp. which has sales of some 390 billion yen.
Japan Tobacco has been looking for ways to expand as Japan's population is rapidly ageing and smoking less.
It recently bought British rival Gallaher for 2.25 trillion yen in the biggest-ever foreign acquisition by a Japanese firm.
Japan Tobacco posted revenue of 286.5 billion yen from its food business in the last fiscal year to March 2007, which accounted for just six per cent of its annual sales.
Katokichi, a major frozen food maker established in 1956 and based in southwestern province of Kagawa, has been struggling to recover from one of Japan's growing number of food safety scandals.