So much for Brexit blues: UK tobacco giant in £38bn bid to buy its US rival

BRITAIN’S biggest tobacco company has launched an audacious £ 38billion bid for an American rival to create one of the largest cigarette manufacturers in the world.

British American Tobacco (BAT) is planning to take full control of Camel and Pall Mall maker Reynolds.

The proposed deal would be the biggest overseas takeover by a British firm for years and undermines claims that Britain’s vote to leave the European Union has shattered business confidence.

It also makes a mockery of warnings that the fall in the pound would deter foreign bids by British firms and instead leave them vulnerable to overseas predators.

Businessman Peter Hargreaves, co-founder of savings

‘Open for business’

and investment firm Hargreaves Lansdown, said: ‘I think this deal proves that Britain is open for business and I think we will see more and more of this.

‘I’m convinced that in ten years’ time everyone will say Brexit was the best thing we ever did and wonder what all the fuss was about.’

London-based BAT already owns 42.2 per cent of Reynolds, which makes many of its cigarettes at its giant plant in Tobaccoville in North Carolina.

BAT is now planning to buy up the remaining 57.8 per cent for £38.3billion – creating the world’s biggest tobacco company by revenues and profits. A successful deal would be the biggest foreign takeover by a British company since the disastrous acquisition of ABN Amro by Royal Bank of Scotland for £63billion in 2007.

It would see BAT brands such as Dunhill, Kent, Lucky Strike and Rothmans come under the same roof as Camel and Newport. BAT sold 663billion cigarettes last year while Reynolds sold 83billion – meaning a combined group would sell 746billion a year or 23,655 a second.

Tory MP Jacob Rees-Mogg, who sits on the Treasury select committee, said: ‘The deal shows there is confidence, businesses are still willing to make decisions, even really big ones like this. All the talk of uncertainty and nervousness is an attempt to exaggerate Brexit issues.’ The merger has yet to be approved by Reynolds’s board of directors. If it is given the green light, the deal will then be put to both BAT and Reynolds shareholders. Reynolds, the second largest cigarette maker in the US, is understood to have told BAT it is open to a deal but may seek a higher price.