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Tobacco Merger: British American Swallows Rest of Reynolds

Image: Tobacco Merger: British American Swallows Rest of Reynolds

In this Friday, July 17, 2015 file photo, Camel and Newport cigarettes, both Reynolds American brands, are on display at a Smoker Friendly shop in Pittsburgh. (AP Photo/Gene J. Puskar, file)

 

By    |   Wednesday, 18 Jan 2017 06:34 AM

A tobacco merger agreement worth more than $49 billion has been reached in a deal that will see British American Tobacco assume full control of Reynolds American Inc., the maker of Camel cigarettes.

British American Tobacco, which already owned 42 percent of Reynolds American’s shares, has agreed to a $49.4 billion deal, which will give them ownership of Reynolds’ remaining shares, according to Bloomberg.

Both companies were in talks about a potential deal in October, but Reynolds, known for selling Camel and Newport cigarettes, initially rejected it, Reuters reported.

However, that changed after BAT increased its offer to Reynolds by more than $2 billion.

Reynolds American’s executive chairman says the tobacco merger “is a win-win” for both companies, according to CNBC.

“This was a hard-negotiated sweet spot between the two sets of shareholders,” executive chairman Susan Cameron told CNBC's "Squawk on the Street" Tuesday. “We feel like we did hit the sweet spot. It is a win-win for both sets of shareholders.”

According to BAT, the merger “creates a stronger, truly global tobacco” company, BBC News noted.

The new deal makes BAT the largest tobacco company in the world.

Shareholders and regulators still have to approve the merger, but, if it goes through, BAT and Reynolds expect it to be a done deal by the third quarter of this year, according to CNN Money.

“We have been a shareholder in Reynolds since its creation in 2004 and have benefited from its growth in the U.S. market,” Nicandro Durante, chief executive of BAT, said back in October during initial talks of a possible deal, USA Today reported.

If approved, the merger brings together some of tobacco industry’s most popular brands, such as Lucky Strike, Rothmans, Dunhill, and Camel cigarettes.

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A tobacco merger agreement worth more than $49 billion has been reached in a deal that will see British American Tobacco assume full control of Reynolds American Inc., the maker of Camel cigarettes.
tobacco, merger, british american, reynolds
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2017-34-18
Wednesday, 18 Jan 2017 06:34 AM
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