Shanghai Tobacco Group (STG) acquired the Zhongnanhai cigarette company as the State Tobacco Monopoly, the parent for both companies, stepped up consolidation in preparation for entry of foreign competitors.
No money changed hands in the transfer.
STG, set up in 1993, is one of China's biggest tobacco companies, with production last year of 1.38 million cases and brands such as Zhonghua, Panda, Shanghai, Red Double Happiness and Peony.