MANILA: Japan Tobacco Inc is in talks over a 45 billion peso ($890 million) deal to buy the assets of a Philippines cigarette maker accused of evading billions of pesos in taxes.

Mighty Corp, which has been charged with avoiding 37.88 billion pesos in tax payments, has offered to pay the Philippines government 25 billion pesos.

It will fund the tax settlement with a 45 billion peso sale of its assets to JT International Philippines, a local subsidiary of Japan Tobacco, the Philippines’ Department of Finance said in a statement, quoting a letter from Mighty President Oscar Barrientos.

A Japan Tobacco spokeswoman in Tokyo confirmed the company was in talks with Mighty to buy its manufacturing and distribution assets, but declined further comment.

Officials at Mighty, the second-largest tobacco company in the Philippines, were not immediately available for comment.

Japan Tobacco, the world’s third-biggest tobacco company, said in May it was looking for mergers and acquisitions in emerging markets such as southeast Asia, Africa and Latin America, as it diversifies away from its home market.—Reuters