November 29, 2016 / 12:55 PM / a year ago

UPDATE 1-Japan Tobacco shakes up management to spur global growth

(Adds details on strategic committee; changes headline)

LONDON, Nov 29 (Reuters) - Japan Tobacco, the world’s third-largest tobacco company, announced management changes on Tuesday designed to accelerate the growth of its international business, which is under pressure to join industry consolidation.

The maker of Winston, Camel and Benson & Hedges cigarettes is set to be dwarfed by its next biggest rival, British American Tobacco, which is in talks to buy Reynolds American in the United States.

Analysts say that takeover could spark further deals as Philip Morris and Japan Tobacco jostle for market share in an industry that is shrinking in Western markets as more people quit smoking.

Japan Tobacco named Belgian national Eddy Pirard as new chief executive of its international business, replacing Thomas McCoy, who will retire on March 31.

Pirard has led Japan Tobacco International’s merger strategy worldwide, including the acquisition of Natural American Spirit outside the United States and also an investment in NTE in Ethiopia.

It also announced the creation of a new “global tobacco strategic committee” to facilitate growth of the tobacco business and named a new president for Japan. It said that would free up the president of the overall tobacco business to focus on global strategy.

Jefferies analysts have predicted that Japan Tobacco would make a takeover bid for Imperial Brands within the next 12 months, and said on Tuesday that the management changes made this more feasible.

“This should lead to greater focus on global M&A opportunities,” Jefferies said in a note.

Reporting by Martinne Geller; Editing by Mark Potter and Jane Merriman

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