Reynolds American Inc. on Monday cleared the final hurdle for its $25 billion acquisition of Lorillard Inc. as a federal judge granted approval allowing the company to go forward with its plan to divest several cigarette brands.
US District Judge Gladys Kessler of Washington, DC, granted a motion that will allow Reynolds to divest Maverick, Kool, Salem and Winston cigarette brands to Imperial Tobacco Group PLC. The divestiture of those brands, which will cost Imperial $7.1 billion, was critical to Federal Trade Commission approval of the deal.
The companies needed judicial approval for that divestiture because they are subject to a nearly decade-old civil judgment in a government racketeering case that requires they obtain court permission before they can divest cigarette brands.
Reynolds and Lorillard announced their planned marriage last July. The agreement included the Imperial divestiture, which was designed to head off concerns the merger would hurt competition and lead to higher prices.
The FTC, which spent nearly a year scrutinizing the deal, granted approval for it late last month. Reynolds has said it expects to close the deal in June.
Full content: The Wall Street Journal
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