Reynolds American Completes Lorillard Acquisition

Executes required brand divestitures to Imperial

Reynolds American Lorillard cigarettes tobacco (CSP Daily News / Convenience Stores / Gas Stations)

WINSTON-SALEM, N.C. -- Reynolds American Inc. has completed its $25.9-billion acquisition, first announced in July 2014, of Lorillard Inc., as well as related divestiture transactions. As a result of the acquisition, Lorillard is a wholly owned subsidiary of Reynolds American, and former Lorillard shareholders will own approximately 15% of Reynolds American’s common stock.

Reynolds American's operating companies have key brands across major industry categories: Newport, Camel, Pall Mall and Natural American Spirit in combustible cigarettes; Grizzly in smokeless tobacco; and Vuse in the vapor market.

In the related divestiture transactions, subsidiaries of Reynolds American have sold the KOOL, Salem, Winston, Maverick and blu eCigs brands, and other assets and liabilities, to ITG Brands LLC, a subsidiary of Imperial Tobacco Group PLC, for $7.1 billion in cash.

Additionally, British American Tobacco PLC maintained its approximately 42% ownership in Reynolds American through an equity investment of approximately $4.7 billion.

“As a result of this acquisition, Reynolds American has a significantly strengthened, balanced and diversified portfolio of iconic brands across all key categories--the most balanced in the industry,” said Susan M. Cameron, Reynolds American’s president and CEO.

“The transaction supports RAI’s efforts to lead the transformation of the tobacco industry. The synergies, improved operational efficiencies and higher sales volumes generated by this combination will better position RAI’s operating companies to fuel continued investment in brand building, R&D and innovation for the long-term future of the company," she said.

Click here for insights into the deal and it's affect on retail programs.

The New York Stock Exchange has delisted Lorillard and suspended trading of its stock, according to a U.S. Securities & Exchange (SEC) document filed on June 12.

Reynolds American is the parent company of R.J. Reynolds Tobacco Co.; American Snuff Co. LLC; Santa Fe Natural Tobacco Co. Inc.; Niconovum USA Inc.; Niconovum AB; and R.J. Reynolds Vapor Co.

R.J. Reynolds Tobacco is the second-largest U.S. tobacco company; its brands include three of the best-selling cigarettes in the United States: Newport, Camel and Pall Mall. American Snuff is the nation’s second-largest manufacturer of smokeless tobacco products; its leading brands are Grizzly and Kodiak. Santa Fe Natural Tobacco manufactures and markets Natural American Spirit 100% additive-free natural tobacco products, including styles made with organic tobacco. Niconovum USA and Niconovum AB market nicotine replacement therapy products in the United States and Sweden, respectively, under the Zonnic brand name. R.J. Reynolds Vapor manufactures and markets Vuse electronic cigarettes.