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."
This premium interiors company offers an attractive opportunity with its fully managed, high-end service encompassing design, manufacturing, and installation, all performed in-house to maintain superior quality. Serving a prestigious client base in a...
This is an opportunity to acquire a high performing business operating in the electronics sector. Expressions of interest with offers should be sent by close of business, 11 July 2025, with a target date for completion of 18 July 2025.
This innovative digital health and integrated care technology provider offers a unique suite of products designed to support the independent living of older people, using advanced IoT sensors and machine learning for effective falls detection and pre...
01
|
Jul
|
UK administrations update: June 25 - July 1 | ADMINISTRATION
Since our last update, the following businesses have been co...
01
|
Jul
|
Fox Group acquires haulage firm in first Stellex-backed deal | BUSINESS SALE
Construction materials provider Fox Brothers Holdings has ac...
30
|
Jun
|
Specialist electronics manufacturer to be acquired in £20m deal | BUSINESS SALE
Landguard Nexus Limited, a specialist electrical and electro...
22
|
Jun
|
Design and interiors business rescued in pre-pack deal | BUSINESS SALE
A Leeds-based design and interiors business has been acquire...
Business Sale Report is the complete resource for finding genuine acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.