After six months of investors sitting on the edge of their seats, watching tobacco stock prices climb, it’s finally here… #-ad_banner-#The Big Tobacco merger. The second-largest U.S. tobacco company, Reynolds American (NYSE: RAI), has agreed to buy Lorillard (NYSE: LO), the third-largest U.S. tobacco company, in a deal valued at more than $27 billion. Assuming it passes regulatory scrutiny, the deal is expected to close in the first half of next year. The combined company would dominate the U.S. tobacco market, producing two of the three leading U.S. brands of cigarettes: Camel and Newport. (The top-selling brand, Marlboro, is produced… Read More
After six months of investors sitting on the edge of their seats, watching tobacco stock prices climb, it’s finally here… #-ad_banner-#The Big Tobacco merger. The second-largest U.S. tobacco company, Reynolds American (NYSE: RAI), has agreed to buy Lorillard (NYSE: LO), the third-largest U.S. tobacco company, in a deal valued at more than $27 billion. Assuming it passes regulatory scrutiny, the deal is expected to close in the first half of next year. The combined company would dominate the U.S. tobacco market, producing two of the three leading U.S. brands of cigarettes: Camel and Newport. (The top-selling brand, Marlboro, is produced by Altria Group (NYSE: MO).) It’s one of the more complicated buyout offers in recent memory, involving four of the five biggest U.S. purveyors of tobacco products. To minimize antitrust issues, Reynolds and Lorillard both will sell assets to Imperial Tobacco Group (OTC: ITYBY). Concurrently, British American Tobacco (NYSE: BTI) plans to purchase a large amount of Reynolds shares. Reynolds American Key to the acquisition is Reynolds’ reach for Lorillard’s leading menthol brand, Newport, giving it 62% of the menthol market. At a time when traditional cigarette sales are consistently trending downward, menthol cigarettes are both profitable and gaining… Read More