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Last Updated : Jan 17, 2017 05:19 PM IST | Source: Reuters

BAT agrees terms to buy Reynolds for $49.4 billion

BAT, which already owned 42 percent of Reynolds, will pay USD 29.44 in cash and 0.5260 BAT shares for each Reynolds share, it said, a 26 percent premium over the price of the stock on Oct. 20, the day before its first offer was made public.


British American Tobacco has agreed a USD 49.4 billion takeover of US rival Reynolds American Inc, creating the world's biggest listed tobacco company after it nudged up an earlier offer by more than USD 2 billion.


BAT, which already owned 42 percent of Reynolds, will pay USD 29.44 in cash and 0.5260 BAT shares for each Reynolds share, it said, a 26 percent premium over the price of the stock on Oct. 20, the day before its first offer was made public.


The Camel and Newport cigarette maker rejected the approach a month later, according to sources, although the two sides remained in talks.


The deal will mark the return of BAT to the lucrative and highly regulated U.S. market after a 12-year absence, making it the only tobacco giant with a leading presence in American and international markets.


BAT Chief Executive Nicandro Durante said bringing the two companies together would drive "sustained profit growth and returns for shareholders".

"It will create a stronger, global tobacco and NGP (next generation products) business with direct access for our products across the most attractive markets in the world," he said on Tuesday.

First Published on Jan 17, 2017 01:40 pm
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