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US Tobacco Giant Philip Morris Buys Into Indonesian Cigarette Maker

Philip Morris says it will acquire 40 percent of Indonesia's third largest cigarette producer, PT Hanjaya Mandala Sampoerna, for $5 billion. The American cigarette maker, known for its Marlboro brand, has also offered to purchase the company's remaining shares.

The family-run Sampoerna makes clove cigarettes, known locally as kreteks.

Philip Morris says the investment would significantly increase its share in the world's fifth-largest cigarette market. Around 70 percent of Indonesian men smoke and sales of kreteks make up more than 90 percent of total cigarette sales in Indonesia.

Niken Rachmad, a spokeswoman for Sampoerna, says the deal would also be an opportunity for the company's brands to be marketed overseas. "We are hoping that, with this international affiliation, Sampoerna will have access to international market as well as the already strong regional market," he said.

In China, the chairman of China Construction Bank, Zhang Enzhao, has quit, reportedly over a corruption scandal. China Construction Bank, one of the four largest state-owned lenders, has named Guo Shuqing as its new head. Mr. Guo has been the mainland's chief foreign exchange regulator since 2001.

Chinese authorities have been investigating state-owned lenders for irregularities to restructure the banks and make them more competitive. One of China Construction Bank's previous chief executives has already been jailed for taking bribes.

Also in China, Canada's Nortel Network Corporation has been selected to provide a digital wireless communications network for a railway linking Tibet with the northwestern Qinghai Province.

Cambodia's largest aid donor nation, Japan, has granted a $29 million loan to build a telecommunications network in the country. The optical fiber cable network will stretch between the southern city of Sihanoukville and the capital Phnom Penh. The project is aimed at boosting economic development in the impoverished Southeast Asian nation.