Tobacco giants in £38 billion merger proposal

British American Tobacco (BAT) has proposed a £38.3 billion merger with US giant Reynolds.

The deal would create the world’s largest listed tobacco company.

BAT owns 42.2% of Reynolds and the proposal involves the acquisition of the remaining 57.8% of the company.

BAT chief executive Nicandro Durante said: “We have been a shareholder in Reynolds since its creation in 2004 and have benefited from its growth in the US market.”

The offer values the Reynolds stake at £46 per share, a 20% premium on close on October 20.