British American Tobacco agrees terms to buy Reynolds for $49.4 billion
Pall Mall cigarettes are seen after the manufacturing process in the British American Tobacco Cigarette Factory (BAT) in Bayreuth. Image Source: Reuters
British American Tobacco (BAT) has agreed a $49.4 billion (nearly Rs 3,28,645.9 crore) 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 $2 billion (nearly Rs 13,305.5 crore).
BAT, which already owned 42% of Reynolds, will pay $29.44 in cash and 0.5260 BAT shares for each Reynolds share, it said, a 26% premium over the price of the stock on October 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 US 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 next generation products (NGP) business with direct access for our products across the most attractive markets in the world," Durante said on Tuesday.