Spain/US: Madrid divestitures could aid tobacco merger

While two US tobacco giants are likely facing antitrust issues in their quest to merge, reports say deal from Spain could aid the transaction.

Reynolds American has been looking to acquire Lorillard for several months, reports say, though sources have told reporters that antitrust issues are one of several complications of striking a potential deal. Now, however, reports say rival Imperial Tobacco Group could aid its rivals’ merger through its own plans in Spain.

Imperial is reportedly looking to sell 30 percent of its operations in Madrid. Those plans could possible put Imperial, based in the UK, at a position to acquire assets divested by Reynolds and Lorillard if they seek regulatory approval for their merger.

While Reynolds’ and Lorillard’s plans have been off-and-on, some experts say Imperial’s plans in Spain could put the deal back in motion.

The US-based cigarette makers are reportedly under pressure to combine as cigarette sales continue global declines, experts say.

Full content: Businessweek

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