Announcement on Acquisition of "Ploom" Intellectual Property Rights from Ploom, Inc.

FOR IMMEDIATE RELEASE

Tokyo, February 17, 2015

Announcement on Acquisition of "Ploom" Intellectual Property Rights from Ploom, Inc.

Please find an announcement concerning the acquisition by Japan Tobacco International (JTI) of a number of patents and trademarks relating to the tobacco vaporization device business from Ploom, Inc. The acquisition is expected to have a minor effect on the Group's consolidated performance for the fiscal year 2015.

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Japan Tobacco Inc. is a leading international tobacco company. Its products are sold in over 120 countries and its internationally recognized brands include Winston, Camel, Mevius and LD. With diversified operations, JT is also actively present in pharmaceuticals and processed foods. The company's revenue was ¥2.154 trillion (US$17,867 million(*)) in the fiscal year ended December 31, 2014(**).

*Translated at the rate of ¥120.55 per $1, as of December 31, 2014

**Due to a change in the accounting period from March 31 to December 31, the fiscal year 2014 covered nine months for Japanese domestic businesses and 12 months for the consolidated subsidiaries which operate the Group's international tobacco business. On a comparable full calendar year basis, revenue was ¥2.433 trillion (US$20,186 million(*)).

Contact: Ryohei Sugata, General Manager Media and Investor Relations Division Japan Tobacco Inc.

Tokyo: +81-3-5572-4292

E-mail: jt.media.relations@jt.com

MEDIA INFORMATION

For immediate release

JTI acquires "Ploom" Intellectual Property Rights from Ploom, Inc.

Geneva, February 16, 2015 - JTI announced today that it has acquired from Ploom, Inc. a number of patents and trademarks relating to the tobacco vaporization device1 business. This is part of JTI's drive to further develop the tobacco vapor category and overall mission to be the
leader in next generation products. The former Ploom, Inc. will buy back JTI's minority stake.
"This agreement is a natural evolution of our fruitful partnership and enables both companies to
concentrate independently on their areas of expertise", says
Masamichi Terabatake, JTI's
Deputy
CEO and
Executive
Vice President for Emerging Products and
Corporate
Strategy.
"With our manufacturing and
tobacco know-how,
JTI has facilitated the
development of the
innovative Ploom
tobacco vapor pods 2 and this is an important element in the
continuous
expansion of our next generation products portfolio."
Financial details of the agreement are confidential.

### For further information, please contact:

Eva Hoeffelman
+41 22 7030319
pressoffice@jti.com

JTI, a

member of

the Japan

Tobacco

Group of Companies, is a leading

international tobacco

manufacturer. It markets world-renowned brands such as Camel, Winston and Mevius (Mild Seven). Other global brands include Benson & Hedges, Silk Cut, Sobranie, Glamour and LD. With headquarters in Geneva, Switzerland, and about 27,000 employees worldwide, JTI has operations in more than 120 countries. Its core revenue in the fiscal year ended December 31, 2014, was USD 11.9 billion. For more information, visit www.jti.com.

1 Patents and trademarks related to Ploom, Inc.'s devices such as the Ploom modelOne and modelTwo and the

Ploom tobacco vapor pods.

2 Tobacco vapor pods are capsules with compressed tobacco for use in the Ploom devices.

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