Tobacco company GIANT has bought USA firm REYNOLDS for USD 50 billion. Reynolds is the second biggest player in the USA market and has three out of the four top-selling cigarette brands.
The deal brings together a raft of global brands, including BAT products Lucky Strike, Rothmans and Kent, and Reynolds’ brands such as Newport, Camel and Pall Mall.
Reynolds shareholders will receive USD 29.44 in cash and 0.5260 BAT ordinary shares, under the terms of the transaction.
That represented an increase of 26 percent compared with the closing Reynolds share price on October 20 — the day before BAT’s unsuccessful bid.
The offer comprises USD 25 billion worth of BAT shares and USD 24.4 billion in cash and values the entire Reynolds group at more than USD 85 billion.
BAT forecasts that it will make at least USD 400 million in annualised cost savings following the purchase, while the deal remains subject to shareholder and regulatory approvals.
The world’s biggest cigarette producer by market share is the state-owned China National Tobacco Corporation, followed by Marlboro maker Philip Morris International.
