BAT agrees terms to buy out Reynolds for $ 49.4 billion

Wednesday, 18 January 2017 00:04 - - {{hitsCtrl.values.hits}}

Reuters: British American Tobacco has agreed a $ 49.4 billion takeover of US rival Reynolds American Inc, creating the world’s biggest listed tobacco company after it nudged up an earlier offer by more than $2 billion.

BAT, which already owned 42% of Reynolds, will pay $29.44 in cash and 0.5260 BAT shares for each Reynolds share, it said, a 26% premium over the price of the stock on 20 October, the day before its first offer was made public. The Camel and Newport cigarette maker rejected the approach a month later, according to sources, although the two sides remained in talks. The deal will mark the return of BAT to the lucrative and highly regulated US market after a 12-year absence, making it the only tobacco giant with a leading presence in American and international markets.

BAT Chief Executive Nicandro Durante said bringing the two companies together would drive “sustained profit growth and returns for shareholders”.

“It will create a stronger, global tobacco and NGP (next generation products) business with direct access for our products across the most attractive markets in the world,” he said on Tuesday.