TOKYO--(BUSINESS WIRE)--December 23, 1999--Japan Tobacco Inc. (JT)(TSE:2914) today stated that the litigation filed recently by the Canadian government against R.J. Reynolds Tobacco Holdings, Inc. and its affiliated companies would have no material effect

``Due to provisions in the Purchase Agreement for RJR International's operations, it is not expected that this lawsuit will materially impact JT and the operations it purchased,'' the company said. JT said that it was not named as a defendant in the lawsuit, although one company that JT acquired, RJR-Macdonald, Inc., is among the defendants named in the lawsuit. JT said when it agreed to purchase the operations of RJR International, RJR Tobacco agreed to retain all liabilities that arise out of any investigation of alleged smuggling in Canada. In addition, JT noted that all allegations made by the Canadian government in their lawsuit relate to time periods prior to the acquisition by JT. Japan Tobacco Inc., with sales in the year ended March 31, 1999 of US $32 billion (translated at a rate of US $1 = Yen 120), is one of the world's largest manufacturers of tobacco products and has three of the world's top five brands in its product portfolio. Since its privatization in 1985, it has actively diversified its operations into pharmaceuticals and foods.

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