British American Tobacco PLC made a $47 billion offer to take full control of Reynolds American Inc.—a move that would create the world’s largest listed tobacco company by revenue and market value, while highlighting the value the US holds for a shrinking global tobacco industry.
Reynolds, which is based in Winston-Salem, N.C., said Friday that its board will evaluate the offer and respond. Analysts expect negotiations between Reynolds and BAT will lead to a higher offer price.
After years of distancing themselves from the US because of mounting civil suits, international tobacco companies are returning as they confront declining cigarette volumes and expanding regulations around the globe.
Last year Reynolds made its own acquisition, clinching Lorillard Inc. after lengthy scrutiny by regulators. The $25 billion deal upended and further consolidated the US tobacco industry, prompting Reynolds to sell its Kool, Salem and Winston cigarette brands and Lorillard’s Maverick to Britain’s Imperial Tobacco Group for $7.1 billion.
Full Content: The Wall Street Journal