"Actively Considering Various Options Including M&A"
First M&A Attempt in About 14 Years If Pursued
On June 4, KT&G announced in a regulatory filing that "nothing has been confirmed so far" regarding reports that the company is pursuing the acquisition of a Nordic nicotine pouch (chewing tobacco) company.
KT&G stated, "We are currently pursuing a strategy to diversify our 'modern product' categories as part of efforts to expand future growth momentum," adding, "We are actively considering various options, including expanding new external partnerships, in-house development, and mergers and acquisitions (M&A)."
Recently, KT&G has reportedly been in negotiations with several nicotine pouch companies as potential acquisition targets. This would be KT&G's first M&A deal in 14 years, since it acquired a 60% stake in Indonesian tobacco manufacturer Trisakti for approximately 140 billion won in 2011.
Nicotine pouches are a type of non-combustible tobacco made by solidifying nicotine extracted from tobacco plants. Users absorb nicotine by placing the pouch against their gums.
Although the domestic market for nicotine pouches is not large, these products are popular in the United States and Europe. In 2022, Philip Morris International entered the market by acquiring Swedish Match, which owns the nicotine pouch brand 'Zyn,' for approximately 22 trillion won.
Previously, KT&G CEO Bang Kyungman also stated at the shareholders' meeting in March that "the company plans to further solidify its position as a market leader by introducing new 'modern products' that go beyond the traditional cigarette-centered business."
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