BAT offers to buy US tobacco firm Reynolds in 47 billion dollars deal | Progresiv
British American Tobacco has offered to buy U.S. tobacco company Reynolds American Inc in a 47 billion dollars deal that would bring together Newport, Kent and Pall Mall cigarettes in the world's biggest listed tobacco company. 
The takeover would give BAT a leading position in the high-value United States market and more premium brands such as Camel which it can sell in countries including Russia and Turkey where demand for Western cigarettes is still growing.
The British group, which already has a 42 percent stake in Reynolds, said its offer valued the company's shares at 56.50 dollars, of which 24.13 dollars would be in cash and 32.37 dollars would be in BAT shares.
The total price for the remaining 57.8 percent of Reynolds would be 47 billion dollars, of which approximately 20 billion dollars would be in cash and 27 billion dollars in BAT shares, BAT said.
BAT Chief Executive Nicandro Durante said the deal would create a U.S. market leader and the world's largest listed tobacco company by net turnover and operating profit.
"The strategic rationale makes perfect sense," Guy Ellison, an analyst at Investec Wealth & Investment, said. The deal would pivot BAT further towards the high value U.S. market, consolidating some strong brands and Reynold's position in "next generation tobacco" products such as e-cigarettes, he added.
The cost synergies associated with the proposed merger are estimated by BAT to be relatively modest at around 400 million dollars.
Reynolds bought Newport-maker Lorillard in 2015, making it a stronger competitor to Marlboro-maker Altria Group. Together, Reynolds and Altria dominate the U.S. market. (www.reurers.com)
