British American Tobacco (BAT) has announced it has acquired the remaining 57.8 percent share of Reynolds American, Inc. With the transaction valued at 49.4 billion dollars, this will make BAT the largest tobacco company in the world. The transaction has been approved by the boards of both companies and now is pending on the approval of shareholders. The transaction is expected to officially close in the third quarter of 2017. The companies’ combined next-generation product development and R&D capabilities will create an innovative pipeline of vapor and tobacco-heating products and new products for adult tobacco consumers.
“We look forward to bringing together the two companies’ highly complementary cultures and shared commitment to innovation and transformation in our industry,” said Debra A. Crew, Reynolds American’s president and chief executive officer. “British American Tobacco is the best partner for Reynolds American’s next phase of growth, and together the two companies will create the leading portfolio of tobacco and next-generation products for adult tobacco consumers.”
Nicandro Durante, British American Tobacco’s chief executive officer, added: “We are very pleased to have reached agreement with the board of Reynolds American as we believe that the combination of our two great companies has a very compelling strategic and financial logic and will provide a lasting benefit to shareholders, employees and all other stakeholders. This transaction will not only create a truly global business with a world-class portfolio of tobacco and next-generation products, but will also benefit from the highly talented and experienced employees in both organizations. We believe that this will drive long-term sustainable profit growth for the benefit of all shareholders.”
At closing, it has been agreed that three of the non-British American Tobacco nominated Reynolds directors will join the board of BAT. The acquisition is said to give BAT a stronger position in the U.S. market, where Reynolds American was the second largest player.
For the latest news regarding the BAT acquisition of Reynolds American, visit batreynolds.transactionannouncement.com.