FOR IMMEDIATE RELEASETokyo, August 21, 2024

JT Group to Acquire Vector Group Ltd.
Japan Tobacco Inc. (JT) (the “Company”) (TSE: 2914) announces today that the JT Group hasreached an agreement with Vector Group Ltd. (“VGR”), the fourth largest tobacco company in theUnited States, to acquire VGR.
Based on the agreement, the JT Group will conduct a tender offer for all outstanding shares ofVGR, through Vapor Merger Sub Inc., an entity the JT Group established for the purpose of thisacquisition. Through the tender offer and a subsequent statutory merger, the JT Group intends toacquire 100% of VGR’s outstanding fully diluted share capital for a per share price of $15.00,
representing a total equity value transaction estimated at around USD 2.4 billion (approximately378 billion yen). The transaction, which is unanimously supported by the board of directors of VGR,
is expected to be completed by the end of JT Group’s current fiscal year, ending December 31,
2024, subject to receipt of antitrust approvals and satisfaction of customary closing conditions.
Following closing, VGR will be a wholly owned consolidated subsidiary of JT and be delisted fromthe New York Stock Exchange.
Strategic rationale
In line with the JT Group’s tobacco business strategy, outlined in Business Plan 2024, thisacquisition will add a growing and historically profitable business, which is expected to improve theCompany’s Return-On-Investment (ROI) in combustibles. The transaction will significantly expand
JT Group’s presence in the US, the second largest tobacco market in net sales and one of themost profitable globally. Furthermore, it is expected to strengthen the Group’s financial position
through mid to long term hard currency profits and cash flows, which will support the Company’sinvestment strategy in Reduced-Risk Products, notably in heated tobacco sticks.
Executive comments“We are excited by this acquisition which, in line with our tobacco business strategy, will contributeto the acceleration of the ROI in our combustible business and expand JT Group’s global footprint.
By adding this sizeable and historically profitable business to our Company, we are confident thetransaction will contribute to sustainable growth and increase JT Group’s corporate value,” said
Masamichi Terabatake, JT Group CEO and President of the Tobacco Business.
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“This transaction will significantly increase our US presence, boosting our market share from 2.3%
to approximately 8.0% and giving us full ownership of two of the top-10 US cigarette brands. The
transaction will enable us to also strengthen our distribution network, and create mid to long term
strategic opportunities to boost our competitiveness in this major tobacco market,” said Eddy
Pirard, President and CEO of JT International.

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1.

Overview of newly acquired company(1) NameVector Group Ltd.

(2) Address

Miami, FL 33137 USA(3) Representative

Howard M. Lorber (President and CEO)

(4) Business description

Manufacturing and sales of cigarettes, etc.

(5) Capitalization

USD 15,598 Thousand (As of December 31, 2023)(6) Year of foundation

1873(7) Major shareholder and holding ratio (As ofBlackRock, Inc. (13.61%)

June 27, 2024)

The Vanguard Group, Inc. (11.35%)
Dr. Phillip Frost (9.38%)
CapitalNone

Personnel

None

BusinessNone

Fiscal year
ended
December 31,
2021

Fiscal year
ended
December 31,2022

Fiscal year
ended
December 31,2023

Net assets(841,553)(807,877)(741,814)

Total assets

871,087

908,591934,095(5.47)(5.22)(4.76)Net sales

1,220,700

1,441,009

1,424,268

Operating profit

320,439

339,010

328,035

Net income

219,463

158,701

183,526

1.16

1.01

1.40

0.80

0.80

0.80

(8) Relationship with JT(9) Financial results audited (Note1)

Accounting period(Dollars in Thousands)

Net assets per share(Dollar) (Note2)

Net income per share(Dollar) (Note3)
Dividend per share (Dollar)

Note1: The results of operations and financial condition of the company are taken from the Form 10-K
filed by VGR with the U.S. Securities and Exchange Commission (SEC).
Note2: Net assets per share is calculated by dividing net assets by the number of common shares
outstanding at the end of each period.
Note3: Diluted EPS is shown.

2.

Overview of Tender Offer(1) Tender offeror

Vapor Merger Sub Inc.

(2) Target CompanyVector Group Ltd.
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(3) Class of shares to be acquired

Common stock (on a fully diluted basis)(4) Tender offer price

US$ 15.00 per share(5) Period of tender offer (planned) From late August or early September 2024 to October 2024

*The offer period under the tender offer will commence
within the next 10 business days and is expected to expire
20 business days after commencement thereof, subject toreceipt of antitrust approvals and satisfaction of customary
closing conditions. If a situation arises whereby theconditions to the tender offer are not satisfied, the period of
the tender offer may be extended, in accordance with theterms of the definitive agreement.
(6) Conditions of tender offer

The tender offer is subject to approval under U.S. andSerbian antitrust laws, the tender of more than 50% of
VGR’s outstanding common stock, and satisfaction of othercustomary closing conditions. Any remaining shares ofcommon stock of VGR that were not tendered - in thetender offer - will be, upon the completion of thetransaction, cancelled and converted into the right toreceive the same consideration payable in the tender offer.

Note 1: VGR is a listed company on the New York Stock Exchange, and the Tender Offer does not constitutea tender offer as defined in Article 27-2-1 of the Financial Instruments and Exchange Law of Japan.
Further information regarding the Tender Offer will be posted on the U.S. Securities and Exchange
Commission’s (SEC) website at http://www.sec.gov.
Note 2: J.P. Morgan Securities LLC and J.P. Morgan Securities plc are serving as exclusive financial advisor
to the JT Group, Ernst & Young Tax Co. is acting as its financial and tax advisor and Freshfields
Bruckhaus Deringer US LLP is acting as its legal counsel. Jefferies LLC is acting as exclusive financial
advisor to VGR and Sullivan & Cromwell LLP is acting as its legal counsel.

3.

Status of the number of shares and consideration for acquisition(1) Number of shares held by

JT Group (before acquisition)(2) Number of shares to beacquired(3) Acquisition price (estimated)

None
157,486,267 shares
The outstanding shares: USD 2.4billion(approximately 378 billion yen)

(4) Number of shares to be held

157,486,267 shares(Ratioof voting rights: 100%)by JT Group (after acquisition)

Note 1: The above figures are based on the assumption that all of VGR’s shares are acquired through the4Tender Offer and a subsequent statutory merger.
Note 2: The acquisition price is converted at the rate of 158.229 yen per U.S. dollar (TTM rate mean inJuly,2024).

4.

Schedule(1) Agreement dateAugust 21, 2024
From late August or early September 2024 to October(2) Period of Tender Offer(planned)

2024. If a situation arises whereby the conditions to thetender offer are not satisfied, the period of the tender offer
may be extended, in accordance with the terms of thedefinitive agreement.

(3) Stock transfer date (planned)

5.

By the end of the fiscal year ending December 31,2024.

Impact on Financial Performance

The transaction is not expected to have any material impact on the Group’s consolidated performancefor the fiscal year ending December 31, 2024.
6.

Notes

Important Information About the Tender Offer
The tender offer for the outstanding common stock of VGR has not yet commenced. This communication
does not constitute a recommendation, an offer to purchase or a solicitation of an offer to sell VGR’ssecurities. An offer to purchase shares of VGR’s common stock will only be made pursuant to an Offer toPurchase and related tender offer materials. At the time the tender offer is commenced, JTI (US) Holding
Inc. and Vapor Merger Sub Inc. will file a Tender Offer Statement on Schedule TO with the Securities andExchange Commission (the “SEC”) and thereafter VGR will file a Solicitation/Recommendation Statement
on Schedule 14D-9 with the SEC with respect to the tender offer. The tender offer materials (including
the Offer to Purchase, a related Letter of Transmittal and other tender offer documents) and theSolicitation/Recommendation Statement on Schedule 14D-9 will contain important information.
VGR’S STOCKHOLDERS ARE URGED TO READ THESE DOCUMENTS (INCLUDING THE OFFER TOPURCHASE AND RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER DOCUMENTS), ANDTHE SOLICITATION/RECOMMENDATION STATEMENT, AS MAY BE AMENDED FROM TIME TO TIME,CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANTINFORMATION THAT THEY SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDINGTENDERING THEIR SHARES OF COMMON STOCK.
The tender offer materials and the Solicitation/Recommendation Statement will be made available forfree at the SEC’s website at www.sec.gov. Copies of the documents filed with the SEC by VGR may be5

obtained

atnocharge

underthe“Investors”

sectionofVGR’sinternet

websiteathttps://vectorgroupltd.com.
Forward-Looking Statements
This announcement may include statements that are not statements of historical fact, or “forward-lookingstatements,” including with respect to the JT Group’s proposed acquisition of VGR. Such forward-looking
statements include, but are not limited to, the ability of the JT Group and VGR to complete the transactions
contemplated by the merger agreement, including the parties’ ability to satisfy the conditions to theconsummation of the offer contemplated thereby and the other conditions set forth in the merger
agreement, statements about the expected timetable for completing the transaction, the JT Group’s andVGR’s beliefs and expectations and statements about the benefits sought to be achieved in the JT
Group’s proposed acquisition of VGR, the potential effects of the acquisition on both the JT Group andVGR, the possibility of any termination of the merger agreement, as well as the expected benefits andsuccess of any combination product. These statements are based upon the current beliefs andexpectations of the JT Group’s and VGR’s management and are subject to significant risks anduncertainties. There can be no guarantees that the conditions to the closing of the proposed transaction
will be satisfied on the expected timetable or at all. If underlying assumptions prove inaccurate or risks or
uncertainties materialize, actual results may differ materially from those set forth in the forward-looking
statements.
Risks and uncertainties include, but are not limited to, uncertainties as to the timing of the offer and thesubsequent merger; uncertainties as to how many of VGR’s stockholders will tender their shares in theoffer; the possibility that various conditions to the consummation of the offer and the merger contemplatedby the merger agreement may not be satisfied or waived; the ability to obtain necessary regulatory
approvals or to obtain them on acceptable terms or within expected timing; the effects of disruption fromthe transactions contemplated by the merger agreement and the impact of the announcement andpendency of the transactions on VGR’s business; the risk that stockholder litigation in connection withthe offer or the merger may result in significant costs of defense, indemnification and liability; generalindustry conditions and competition; general economic factors, including interest rate and currency
exchange rate fluctuations; the impact of COVID-19; the impact of tobacco industry regulation andtobacco legislation in the United States and internationally; competition from other products; andchallenges inherent in new product development, including obtaining regulatory approval.
Neither the JT Group nor VGR undertakes any obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or otherwise, except to the extent
required by law. Additional factors that could cause results to differ materially from those described in theforward-looking statements can be found in Japan Tobacco Inc.’s integrated report for the year ended
December 31, 2023, VGR’s Annual Report on Form 10-K for the year ended December 31, 2023 andVGR’s Quarterly Reports on Form 10-Q for the three months ended March 31, 2024 and June 30, 2024,
in each case as amended by any subsequent filings made with the SEC. These and other filings madeby VGR with the SEC are available at www.sec.gov.
6###Japan Tobacco Inc. (JT) is a global company headquartered in Tokyo, Japan. It is listed on the primary section of the Tokyo
Stock Exchange (ticker: 2914.T). JT Group has approximately 53,000 employees and 62 factories worldwide, operating inthree business segments: tobacco, pharmaceutical, and processed food. Within the tobacco business, the largest segment,
products are sold in over 130 markets and its flagship brands include Winston, Camel, MEVIUS, and LD. The Group iscommitted to investing in Reduced-Risk Products and markets its heated tobacco products under its Ploom brand.
Consumers, shareholders, employees, and society are the four stakeholder groups (4S) at the heart of all of JT Group'sactivities. Inspired by its “Fulfilling Moment, Enriching Life” purpose, the Group aims to ensure sustainable and valuablecontributions to its stakeholders over the long term. In addition to our three business segments, this goal is also supportedby D-LAB, the JT Group’s corporate R&D initiative, set up to search and create added-value business opportunities. For
more information, visit https://www.jt.com/.

Contact:

Investor and Media Relations Division
Japan Tobacco Inc.
For Investors
For Media

Jerome Jaffeux, Head of IR: jt.ir@jt.com
Yunosuke Miyata, Director: jt.media.relations@jt.com

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