Despite US smoking statistics being at an all-time low, but that doesn’t seem to be curbing investor’s interest in purchasing from a resurgent US tobacco market.
British American Tobacco, a multinational British tobacco company and one of the biggest in the world, has agreed to snap up the remaining stake in their rival company Reynolds American, a remainder that they don’t already own.
The takeover, worth a proposed $49.4bn, will create the world’s largest listed tobacco company in terms of sales. It’s also the first time British American Tobacco will be operating in the US since it initially folded in the US a decade ago.
The US tobacco market has been described as “highly attractive†by British American Tobacco chief executive Nicandro Durante, who added that it was the “world’s largest tobacco profit pool†other than China as his reasoning for British American Tobacco eyeing Reynolds.
Durante believes the purchase is providing British American Tobacco with “an exciting opportunity for long-term growth†as the revenue per pack of cigarettes in the US is rising quicker than in any other developed market.
The move was reported way back in October, with British American Tobacco brushing off Brexit fears and planning a $47m swoop for the American tobacco company.
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