US: Reynolds-Lorillard tobacco merger cleared by FTC

U.S. antitrust enforcers on Tuesday cleared Reynolds American Inc. to proceed with its $25 billion acquisition of Lorillard Inc., ending months of uncertainty about whether the government would allow the second- and third largest U.S. cigarette makers to combine.

Reynolds and Lorillard announced their planned marriage last July, part of a three-way deal in which the companies agreed to sell $7.1 billion in cigarette brands and other assets to UK-based Imperial Tobacco Group PLC. The move was designed to head off concerns that the merger would hurt competition and lead to higher prices.

The Federal Trade Commission, which spent nearly a year scrutinizing the deal, on Tuesday said it was satisfied the divestitures would restore market competition that would have been lost through the merger, with Imperial “positioned to be a sufficiently robust and aggressive competitor” to a combined Reynolds-Lorillard and industry leader Altria Group.

Full content: Fortune

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