BAT makes US$47b offer for Reynolds
BRITISH American Tobacco has launched a massive US$47 billion bid for full control of Reynolds American, as it seeks expansion into the US – the second-largest market after China.
The deal for the 58 percent of Reynolds that BAT does not yet own would cement its status as one of the world’s largest tobacco companies.
BAT said the move would give it “a leading position in the US tobacco market” as well as “a significant presence in emerging markets”.
“The main reason for the deal is for BAT to be in the United States,” a company spokesperson told AFP, noting that the company did not have a direct presence there.
She added that building on the popularity of e-cigarettes was also a motivation behind the deal.
The blockbuster proposal would bring together BAT brands Dunhill, Kent and Lucky Strike cigarettes with Reynolds’ Camel and Newport.
The combined group would have a “world class pipeline” of so-called next generation products like ecigarettes, in a fast-growing part of the market, the statement said.
Most global tobacco firms are looking to emerging markets to offset sliding demand in Western Europe, where high taxes, public smoking bans and health concerns have persuaded many people to give up or turn to e-cigarettes, batterypowered devices that heat a nicotine liquid.
The world’s biggest cigarette producer by market share is the stateowned China National Tobacco Corporation, followed by Marlboro maker Philip Morris.
Merged with Reynolds American, BAT would win some ground but remain the third-biggest player, according to data-gatherer Euromonitor.
However, BAT said it would be the biggest listed tobacco firm by net turnover and operating profit.
The deal values the WinstonSalem, North Carolina Reynolds at $93 billion. BAT noted Reynolds’ 2015 purchase of Lorillard, the manufacturer of the Blu e-cigarette, had “strengthened” the US group. –