British American Tobacco has send US rival Reynolds American an offer to buy its shares

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BAT plots $47bn merger move on US rival Reynolds American.

The maker of Benson & Hedges could soon come together with the company behind the Camel brand as British American Tobacco (BAT) seeks a mega-merger.The FTSE 100 company has proposed paying $47bn (£39bn) for the 57.8% of the shares it does not already own in US rival Reynolds. A deal would create the world’s largest listed tobacco company and give BAT greater access to the growing e-cigarette market.

Regarding the deal 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 proposed merger of our two great companies is the logical progression in our relationship and offers all shareholders a stake in a stronger, truly global tobacco and next generation products company. BAT is proud of its track record of consistent delivery for shareholders and this transaction would further strengthen that delivery in the future.”

The offer represents a 20% premium against the closing price of Reynolds shares on Thursday. BAT said its cash and shares proposal for Reynolds, should it be accepted by the company, would create a tobacco firm with the largest global profit pool, excluding China.

The firm would have not only a leading position in the US but also a significant presence in high-growth markets including South America, the Middle East and Africa as more established markets shrink.

About the Author

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Martina T.
Martina Terzieva is a content writer for Business News Feeds. She likes to dig deep, find the most interesting things that happen and share them with the world. Besides news, Martina writes poetry, she's also a musician and a sound engineer.

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