Tuesday 10 December 2019

British American Tobacco agrees $49.4bn takeover of US rival Reynolds American

BAT already owned 42pc of Reynolds Photo: PA
BAT already owned 42pc of Reynolds Photo: PA

British American Tobacco has agreed a $49.4bn takeover of US rival Reynolds American, creating the world's biggest listed tobacco company after it nudged up an earlier offer by more than $2bn.

BAT, which already owned 42pc of Reynolds, will pay $29.44 in cash and 0.5260 BAT shares for each Reynolds share, it said, a 26pc premium over the price of the stock on Oct. 20, the day before its first offer was made public.

The Camel and Newport cigarette maker rejected the approach a month later, according to sources, although the two sides remained in talks.

The deal will mark the return of BAT to the lucrative and highly regulated U.S. market after a 12-year absence, making it the only tobacco giant with a leading presence in American and international markets.

BAT Chief Executive Nicandro Durante said bringing the two companies together would drive "sustained profit growth and returns for shareholders".

"It will create a stronger, global tobacco and NGP (next generation products) business with direct access for our products across the most attractive markets in the world," he said on Tuesday.


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