Reynolds American to buy Lorillard in monster deal worth US$27.4 billion
July 17, 2014, 12:01 am TWN
NEW YORK--U.S. tobacco giant Reynolds American will acquire rival Lorillard to create a behemoth aimed at conquering the growing e-cigarette market, the companies announced Tuesday.
Reynolds, the second-biggest U.S. tobacco producer with its Camel and Pall Mall brands, will buy the U.S. number-three Lorillard for US$68.88 per share in a deal worth US$27.4 billion, including debt, the companies said.
The two companies also plan a major divestment of assets to British firm Imperial Tobacco. Following the completion of the Reynolds-Lorillard deal, Imperial will acquire leading Reynolds and Lorillard brands, including Kool, Salem, Winston and Blu, an e-cigarette.
Imperial will pick up Lorillard's manufacturing and research site in Greensboro, North Carolina, which includes 2,900 employees.
Imperial, the maker of Gauloises and Davidoff cigarettes, will pay US$7.1 billion in cash for the assets.
Reynolds will receive US$4.4 billion after taxes from the Imperial deal, which is contingent on the closing of the Reynolds-Lorillard transaction.