British American Tobacco, the giants who own Lucky Strike, Pall Mall and Rothmans have launched an audacious $47bn bid to buy its US partner Reynolds American.
Reynolds American is the second biggest American tobacco company behind the world’s biggest, Altria, and British American Tobacco already has a 42.2% stake in its interests.
The bid is one of the biggest UK bids for a foreign company in recent years, and would make British American Tobacco the biggest cigarette company in the world.
“The proposed merger of our two great companies is the logical progression in our relationship. It offers all shareholders a stake in a stronger, truly global tobacco and next-generation products company,†said Nicandro Durante, chief executive of British American Tobacco.
It’s still unclear as to whether Reynolds will accept the bid from British American Tobacco of $47bn.
A share in British American Tobacco fell by 2.8% to £46.66 yesterday, whilst shares in Reynolds were up 14% on Wall Street.
The economic activity surrounding tobacco continues to surprise. It has recently emerged that investors are snapping up tobacco shares, despite crippling tax increases.
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