Reynolds American (RAI) will consolidate sales and distribution for all its companies into a newly created subsidiary next year, the company said.

RAI Trade Marketing Services will facilitate sales, distribution and retail/wholesale strategy for R.J. Reynolds Tobacco, American Snuff, Santa Fe Natural Tobacco and R.J. Reynolds Vapor brands, under service agreements. “It also offers benefits to business partners as they will have a single point of contact, and the field trade marketing team will continue to offer valuable guidance on business growth across the total tobacco category to retail partners,” said Mike Auger, president of the new unit.
The consolidation precedes an expected RAI counter offer to the USD 47 billion (EUR 43.6 billion) takeover bid tabled by British American Tobacco in October, said Bonnie Herzog, tobacco analyst at Wells Fargo Securities. RAI already has rejected the initial offer, according to unconfirmed wire service reports.
Consolidation makes RAI a more attractive proposition and should be followed by an RAI counter offer to BAT, Herzog said in a note to investors. RAI is expected to ask USD 1-3 more per share more than the BAT cash/shares offer valuing RAI stock at USD 53.34, she said.