Reynolds American to complete deal with Lorillard by 12 June
09 Jun 2015
Reynolds American, known for Camel and Pall Mall cigarettes, said its $25-billion deal to buy rival Lorillard would be completed on Friday.
The announcement yesterday came after Reynolds received approval from a US court to sell some brands, including Kool, Salem and Maverick, to UK's Imperial Tobacco for $7.1 billion.
Reynolds' first announced its intention to buy Winston, North Carolina-based Lorillard last year (See: RJ Reynolds mulls stake in $20-bn rival Lorillard Inc: Report).
Under the deal, Lorillard would bring its best known brand, Newport, to Reynolds.
Reynolds, said it expected its combination with Lorillard to boost revenue to over $11 billion a year. Reynolds last year, posted $8.5 billion revenue.
Shares of Reynolds American Inc dipped 48 cents to $70.99, while shares of Lorillard Inc were a penny up to $71.07.
Reynolds American yesterday said it had cleared the final hurdle for its roughly $27.4-billion purchase of smaller rival Lorillard Inc after US district judge Gladys Kessler in Washington, DC granted an unopposed motion allowing the transfer of the Kool, Maverick, Salem and Winston brands to Imperial Tobacco Group Plc .
Reynolds had last month received the Federal Trade Commission's nod for its proposed purchase of Lorillard, which would combine the second- and third-largest US tobacco companies, if they divested the four cigarette brands.
Imperial ranks as the fourth-largest tobacco company globally.
The transfer was assured after judge Kessler was assured by tobacco companies that it would not affect television spots they aired to correct previous deceptive advertisements.
The judge was overseeing a case brought by the US in 1999 that accused cigarette companies of deceptive marketing regarding the risks of cigarette smoking.
Altria Group, maker of Marlboro cigarettes, is the leader in the US market.
