The Federal Trade Commission in a 3-2 vote approved the USD 27.4 billion (EUR 25.1 billion) Reynolds American (RAI) merger with Lorillard subject to the previously agreed sale of four cigarette brands to Imperial Tobacco, the regulatory body said.

RAI in a separate statement said the transfer of Winston, Kool, Salem and Maverick to Imperial is subject to federal court approval. The transfer is uncontested and should receive court approval by the end of June, RAI said.
“The remaining significant condition to closure of the transaction is approval from the federal district court overseeing United States v. Philip Morris USA Inc., et al,” RAI said. “This case was brought by the US Department of Justice in 1999 against several tobacco companies, including RJ Reynolds Tobacco Company, an indirect subsidiary of RAI, and Lorillard Tobacco Company, a subsidiary of Lorillard, Inc.
“Under the terms of the court’s remedial order entered in 2006, before RJ Reynolds can transfer cigarette brands to Imperial Tobacco’s ITG Brands, LLC subsidiary, the court must enter an order finding that ITG Brands intends to and is capable of complying with the court’s remedial order in relation to the cigarette brands that ITG Brands is purchasing.”
A government monitor will be named to oversee the divestiture, FTC said. Merger approval also is contingent on the previously agreed transfer to Imperial of the Lorillard plant and headquarters in Greensboro, North Carolina.