Russia takes temporary control of Japan Tobacco International assets, Digi Mart USA News: Russia is continuing its policy of forced corporate takeovers. The Kremlin has placed assets of the tobacco company Japan Tobacco Russia under the temporary control of a Russian entity, a further step in a growing series of state interventions against international companies with direct consequences for shareholders worldwide.
Several subsidiaries of the group, which is responsible for the Winston and Camel cigarette brands, are affected. According to De Telegraaf, Russian President Vladimir Putin first transferred the central production sites of Japan Tobacco International (JTI) on Thursday to a Russian company, including cigarette factories in Saint Petersburg and tobacco processing facilities in the Lipetsk and Leningrad regions.
Shortly afterward, three further local subsidiaries were transferred to the same company. Reports of these measures immediately triggered a significant decline in JTI’s share price.
Japan Tobacco has been the market leader in Russia since its 1999 acquisition of R.J. Reynolds’ tobacco business, employing around 4,000 people.
The group is headquartered in Geneva.
In April 2007, JTI reached another milestone with the acquisition of the British Gallaher Group, which manufactured Benson & Hedges, among other brands. That transaction surpassed the company’s own 1999 record as the largest overseas acquisition by a Japanese company and more than doubled group revenue compared with 2006.
Putin created the legal basis for these interventions in 2023 with a dedicated decree. It allows the Kremlin to place parts of companies from so-called “unfriendly countries” under state administration.
Countries considered unfriendly are those that support Ukraine following the start of Russia’s full-scale invasion, a category that includes many Western industrialized nations.
In Germany, Japan Tobacco International operates through JT International Germany GmbH. Production for the entire European market runs through the Trier site, while administration for Germany is based in Cologne.
Beyond cigarettes, the group’s portfolio includes cigars, cigarillos, roll-your-own tobacco and smokeless tobacco products under brands such as Old Holborn, Amber Leaf and Gustavus Snus.
Japan Tobacco is not an isolated case. In September, Putin placed the Russian subsidiaries of the Swiss food giant Nestlé and the French supermarket chain Auchan under temporary state control.
Also this year, the Dutch paint manufacturer AkzoNobel was affected by comparable measures. Russia had previously taken similar steps against Danone and the brewing company Carlsberg.
Ukraine lists JTI, along with Mars and Philip Morris, among war sponsors because of market activities despite sanctions, while Russia takes over operations.
For investors the situation is clear: the seizures affect a company deeply rooted in Russia that must now watch its structures there come under foreign control piece by piece. Whether and when these assets will be returned cannot currently be reliably determined.
(Sources: De Telegraaf, fr.de)
