British American Tobacco plans $47bn merger with US firm Reynolds

Mon, 24 Oct 2016 | MERGER

British American Tobacco (BAT) plans to merge with its US partner Reynolds to create the biggest tobacco firm in the world in a deal valued at $47 billion (£38 billion).

BAT, whose brands include Dunhill and Lucky Strike, already owns 42.2 per cent of Reynolds and wants to buy the remainder of the company.

Reynolds is the second-largest tobacco firm in America. Its cigarette brands include Newport, Camel and Pall Mall.

FTSE 100-listed BAT is offering $20 billion (£16 billion) in cash and $27 billion (£22 billion) in shares for the US business, valuing it at $56.50 (£46) a share.

Last year, Reynolds acquired US tobacco firm Lorillard for $25 billion (£20 billion), strengthening its position as a leading American cigarette brand.

BAT’s move has surprised some analysts, who didn’t expect a UK firm to be so bold post-Brexit.

Dominic O'Connell, a business presenter on the BBC Radio 4’s Today programme, said: “This is the biggest foreign deal by a British company in recent years, and flies in the face of the prevailing, post-Brexit wisdom that a weak pound would stop British companies buying foreign rivals.”

If combined, the company would be the world’s largest listed tobacco firm by turnover and operating profit.

Nicandro Durante, BAT chief executive, said: “We have been a shareholder in Reynolds since its creation in 2004 and have benefited from its growth in the US market. The acquisition of Lorillard in 2015 has further strengthened Reynolds’s business. 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."


Share this article



Latest Businesses for Sale

Unique Company Specialising in Quality, Scented Products
Warwickshire, UK Wide

This is a reputable and constantly growing company, receiving a significant amount of revenue through both new and existing customers and is ready for large scale expansion. Products are colourful, vibrant and playful and are created using only the f...

Asking Price: Offers Invited
Turnover: £1,600,000

LEASEHOLD


Membranes for Water Containment Solutions
Midlands, UK Wide

Specialises in turn-key water containment solutions, overseeing pond and lake construction, membrane lining and safe drinking water storage. Operates from a leasehold aquatic nursery able to accommodate over 10,000 m2 of coir products. Offers invited...

Asking Price: Offers Invited
Turnover: £1,700,000

Online Luggage Retailer
London, London, UK

Rapidly growing online luggage retail business. Much time, effort and money has been put into the online side of the business, with tens of thousands going into search engine optimisation and Adwords. This is now paying off as the business is a top s...

Asking Price: £799,995
Turnover: £1,700,000

LEASEHOLD



View more businesses for sale

News Search

Latest News

 
20
 
Nov
 

Customer reviews specialist Feefo completes MBO | MBO/MBI

A company that provides a platform for customer reviews and ...

 
18
 
Nov
 

Kent childcare group sold to national charity | BUSINESS SALE

A Kent childcare group has been acquired by a chain of day n...

 
17
 
Nov
 

Warm Zones enters administration | ADMINISTRATION

A North Shields-based non-profit business dedicated to helpi...

Free guide: 10 Biggest Buyer Mistakes

Sign up to receive our acquisition alert emails to get your FREE guide

Email


Want access to the latest businesses for sale?

Business Sale Report is your complete solution to finding great acquisition opportunities.

Join today to receive:

  • Comprehensive range of businesses for sale
  • Make direct contact with business sellers or their intermediaries
  • Access to all UK administrations, liquidations and winding-up petitions
  • Daily email alerts for the latest businesses for sale & distressed notifications
  • Business Sale Report publication posted to you every month
  • Advertise your acquisition requirements on our "business wanted" section

All this and much more, including the latest M&A news and exclusive resources