British American Tobacco and Reynolds American will merge operations under a deal valued at USD 49.4 billion (EUR 46.6 billion) that gives BAT full control of RAI and direct access to the US market, the companies said.
“It will create a stronger, global tobacco and NGP (new generation products) business with direct access for our products across the most attractive markets in the world,” said BAT Chief Executive Officer Nicandro Durante. The agreement represents about USD 2.4 billion more than BAT’s original offer on 21 Oct for the 57.8 per cent of RAI that it does not already own.
Under the cash and shares deal, BAT would pay RAI shareholders USD 29.44 per share plus a half-share (0.526) stake in BAT. “Through this transaction, we form an industry leader that will focus on innovation and brand building,” said Susan Cameron, executive chairman of RAI’s board of directors.
Per-share, the deal represents a 26.4 per cent premium to RAI’s closing price one day before the initial BAT offer. Shareholders at both companies and regulators must approve the deal.