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KT&G strikes a new partnership with U.S. tobacco giant Altria

Published: 23 Sep. 2025, 18:41 Updated: 23 Sep. 2025, 19:36

KIM MIN-YOUNG
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KT&G CEO Bang Kyung-man, left, signs a comprehensive MOU with Altria CEO Billy Gifford on Sept. 23 to establish a strategic partnership in the global nicotine and non-nicotine markets and poses for a commemorative photo. [KT&G]

KT&G unveiled an upgraded shareholder return plan and set double-digit growth targets for this year, while striking a new partnership with U.S. tobacco giant Altria. The announcements came on Tuesday at the company’s “CEO Investor Day” in Seoul.

Chief Executive Bang Kyung-man said KT&G would adopt an enhanced “shareholder return distribution principle,” aimed at boosting corporate and shareholder value through more efficient use of excess capital.

The plan includes keeping the shareholder return rate above 100 percent and the dividend payout ratio above 50 percent. The company also pledged to set a minimum dividend yield and repurchase shares flexibly when its stock trades below intrinsic value. Additional returns will come through a mix of dividends and buybacks, underscoring a pledge of steady dividend growth.

For this year, KT&G raised its annual dividend to a minimum of 6,000 won ($4.30) per share, up 600 won from last year. It also launched a 260-billion-won share buyback and cancellation program, funded by selling non-core assets such as real estate. Combined, the measures represent 276 billion won in extra shareholder returns, a 171 percent jump from last year.

The company has already retired 10.4 percent of its outstanding shares since 2023. The new buyback will push that figure higher.

Before the investor day, Bang signed a memorandum of understanding with Altria Chief Executive Billy Gifford. The deal creates a strategic partnership across nicotine and non-nicotine businesses. As part of the agreement, the two companies will jointly acquire Another Snus Factory (ASF), a Scandinavian producer of nicotine pouches.

KT&G and Altria plan to roll out ASF's LOOP brand and Altria's "on!" pouches through KT&G’s global distribution network. Korea Ginseng Corporation, KT&G’s health-supplements arm, will also seek to expand in the United States by tapping into Altria's distribution and consumer data.

“KT&G chose to increase dividends and repurchase shares because of the strong growth in our global business,” a company spokesperson said. “The MOU with Altria, one of America’s leading tobacco companies, will give us momentum to expand our portfolio and strengthen our competitiveness.”

BY KIM MIN-YOUNG [[email protected]]