WINSTON-SALEM, N.C. -- Reynolds American Inc. (RAI) said that it has reached an agreement to sell Lane Ltd. to Scandinavian Tobacco Group A/S (STG), a global company based in Denmark. Under terms of the transaction, STG has agreed to pay $205 million in cash for Lane.
The transaction is expected to close in the first half of 2011, pending anti-trust review and approval.
Lane, based in Tucker, Ga., is a wholly owned subsidiary of RAI. Another RAI subsidiary, R.J. Reynolds Tobacco Co., handles Lane's sales, marketing and distribution through a services agreement. Lane [image-nocss] manufactures a variety of tobacco products including Kite and Bugler roll-your-own (RYO) tobacco, and Captain Black pipe tobacco.
STG is a leading seller of pipe tobacco and cigars and has a strong position within RYO in Scandinavia.
"Reynolds American's operating companies are strategically focused on key brands in the cigarette, moist-snuff and modern smoke-free categories of the tobacco business, so this is an opportunity to maximize the potential of the Lane business and brands under an owner who is focused on the 'other tobacco products' (OTP) category," said Susan M. Ivey, president and CEO of Reynolds American.
"The sale allows RAI and its operating companies to devote their energy and resources to the primary growth categories within their businesses," Ivey added.
Lane has about 110 employees at two facilities in Tucker--a manufacturing and office facility, and a leased warehousing facility. Under terms of the agreement, STG will take over Lane's facilities and expects to continue to operate them.
Winston-Salem, N.C.-based RAI is the parent company of R.J. Reynolds Tobacco Co.; American Snuff Co. LLC; Santa Fe Natural Tobacco Co. Inc.; and Niconovum AB.
R.J. Reynolds is the second-largest U.S. tobacco company. The company's brands include five of the 10 best-selling U.S. cigarettes: Camel, Pall Mall, Winston, Doral and Kool. American Snuff (formerly Conwood Co.) is the nation's second-largest manufacturer of smokeless tobacco products. Its leading brands are Kodiak, Grizzly and Levi Garrett. Santa Fe manufactures Natural American Spirit cigarettes and other additive-free tobacco products, and manages and markets other super-premium brands. Niconovum markets nicotine replacement therapy products in Sweden and Denmark under the Zonnic brand name.
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