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

Luxury Kennels & Cattery
Yorkshire and the Humber, UK

Luxury kennels and cattery with professional grooming parlour (licensed for 142 dogs and 26 cats) in Peterborough for Sale. An opportunity to acquire this luxury kennels and cattery with stunning spacious four bedroom detached residence which must be...

Asking Price: £1,500,000
Turnover: £522,542

LEASEHOLD


Haulage Business
South Wales, Wales, UK

The business has been established for a number of years and has been owned and operated by the founder since that date. Offers invited.

Asking Price: £850,000
Turnover: £2,595,443

FREEHOLD


Bar & Function Room
Ilkley, Yorkshire and the Humber, UK

Situated in the heart of Ilkley town centre just off the busy Brook Street. The yard is a stylish bar offering a wide range of drinks, good, quality food, music with varied DJ’s and live artists all encompassed in an interesting layout. Offers invite...

Asking Price: £775,000
Turnover: £600,000

FREEHOLD



View more businesses for sale

News Search

Latest News

 
22
 
Mar
 

Scunthorpe nightclub up for sale | BUSINESS SALE

A former nightclub based in Scunthorpe has been put up for s...

 
21
 
Mar
 

Kent Logistics provider completes a successful acquisition | BUSINESS SALE

A Kent-based personalised logistics provider, backed by Livi...

 
20
 
Mar
 

Warrington construction company enters administration | ADMINISTRATION

A prominent construction business headquartered in Orford Gr...

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