Honduran tobacco company Davidus Cigars (NYSE:DAVID) said Wednesday it has sold a $200 million dollar (US$204 million) purchase of Chinese cigar maker Zhongyi Cigars for an undisclosed sum.
The sale is the first major cigar company buyout by Chinese tobacco giant Zhongyu Cigars, which announced in September that it would buy Honduran cigars maker Davidus.
The deal is the latest in a string of acquisitions by China in the tobacco industry, which has seen a surge in investments in the U.S. and other countries, and is expected to continue.
Zhongyi has been selling cigar brands such as Havana and La Marzocco to cigarette companies and retailers, while Davidus is known for its cigars.
Davidus is owned by Hong Kong-based sovereign wealth fund China Investment Group, and its shares are listed on the Hong Kong Stock Exchange.
It was founded in 2011 by the brothers who own Davidus, David Lu, and David Yu.
Davidson said the acquisition of Zhongyi will allow Davidus to focus on its mission of making cigars and accessories for the international cigar and tobacco markets.
Daviduses cigars will be made in the Dominican Republic, according to a statement.
The transaction is expected take place in the third quarter of 2021, with Zhong Yi Cigars expected to begin manufacturing its first line of Davidus cigars in the second quarter of 2022.