The US$ 3.56 billion demerger of Gallaher, the UK tobacco manufacturer from American Brands, its US parent company, has been cleared by the US Internal Revenue Service (IRS)

The approval for a tax-free transaction removes the last hurdle of a demerger that will finalize American Brands’ exit from the tobacco sector and associated damages claims from former smokers. Gallaher (Benson and Hedges, Silk Cut), will now be listed on the London stock exchange. Mr Thomas Hays, chairman and chief executive of American Brands, described the approval by the IRS as a “key milestone” in the demerger.