Tobacco giant BAT bids $47b for control of Reynolds
AFP
AFP, LONDON: British American Tobacco said Friday it had launched a $47-billion (43-billion-euro) takeover bid for control of rival Reynolds American, as it eyes rapid expansion in US and emerging markets.
The deal would create the worlds largest listed tobacco company by net turnover and operating profit, BAT said in a statement.
It would bring together BAT brands Dunhill, Kent and Lucky Strike cigarettes with Reynolds Americans Camel and Newport.
BAT said the proposal would give it a leading position in the US tobacco market and a significant presence in high growth emerging markets across South America, Africa, the Middle East and Asia, together with the most attractive developed markets.
And the combined group would have a world class pipeline of so-called next generation products, like e-cigarettes, in a fast-growing part of the market, it added.
The cash-and-shares offer would see BAT purchase the 57.8-percent of Reynolds American that it does not already own.
The bid, pitched at $56.50 per Reynolds share, was a 20-percent premium on Thursdays close and will comprise some $20 billion in cash and $27 billion in BAT shares.
BAT, which already holds a 42.2-percent stake in Reynolds American, added that it had not yet held formal talks due to US securities laws.
The London-listed company noted that Reynolds 2015 purchase of US tobacco behemoth Lorillard, the manufacturer of the Blu e-cigarette, had strengthened the US group.
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, said BAT chief executive Nicandro Durante.
