Key points:
Japan Tobacco International's Canadian subsidiary JTI-MC has reached a preliminary settlement agreement with two other tobacco companies in the Quebec smoking and health lawsuit, agreeing to pay a settlement amount of 3.25 billion Canadian dollars.
In 2019, the Quebec Court of Appeal rejected a request from the defendant tobacco company. Subsequently, the defendant company applied to continue operating under the Companies' Creditors Arrangement Act and entered into a mediation process with creditors. In January 2025, the mediator proposed a settlement agreement, and JTI-MC and other companies reached an agreement on the payment terms for the settlement amount.
JTI plans to include litigation loss reserves related to the settlement fund in its 2024 operating expenses. The restructuring plan will be finalized after court approval, and JTI's dividend plan of 194 yen per share remains unchanged.
On March 3rd, Japan Tobacco International (JTI) announced on its official website that its Canadian subsidiary, JTI-Macdonald Corp. (hereafter referred to as JTI-MC), along with two other tobacco companies, Rothmans, Benson & Hedges Inc. and Imperial Tobacco Canada Limited, have reached a preliminary agreement on the mediation process for the smoking and health lawsuit in Quebec, Canada. They submitted relevant documents to the Ontario Superior Court on February 27th.
The background of this lawsuit dates back to March 1, 2019, when the Quebec Court of Appeal rejected the requests of three tobacco companies who were defendants in a class action lawsuit related to smoking and health. Following this, the tobacco companies applied to the Superior Court of Ontario to utilize the Companies' Creditors Arrangement Act to ensure they could continue operating within this legal framework. Subsequently, the tobacco companies began a mediation process with various creditors, including the plaintiffs in the Quebec class action lawsuit, in hopes of eventually resolving these pending lawsuits.
In January 2025, the court held a hearing on the proposed CAD 32.5 billion (USD 23.3 billion) settlement payment plan put forth by mediators. JTI-MC and other defendants have agreed on the terms of the settlement payment. The companies plan to include the provision for litigation losses related to this settlement payment in their operating expenses for 2024.
JTI stated that the restructuring plan will be finalized after necessary procedures, including court approval. Even if the arrangement of this provision fund is confirmed, the previously announced dividend plan of 194 yen (scheduled) per share for 2024 on February 13 will remain unchanged.
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