GREENSBORO, N.C. -- Lorillard Inc. announced on January 28 that at a special meeting, the company's shareholders voted overwhelmingly to approve the proposal regarding Lorillard's combination with Reynolds American Inc.
The companies first announced the deal, worth approximately $25 million, in mid-July 2014.
The transaction will unite Reynolds American, the No. 2, and Lorillard, the No. 3 tobacco company in the United States, challenging No. 1, Richmond, Va.-based Altria Group Inc. and its Philip Morris USA Inc.
At the time, Reynolds American also reached an agreement with U.K.-based Imperial Tobacco under which Imperial will purchase the blu eCigs brand; the KOOL, Salem, Winston and Maverick combustible cigarette brands; and other assets and liabilities for a total consideration of $7.1 billion to head off regulatory concerns about competition.
The final results indicate that more than 98% of the shares voting at the Lorillard meeting voted in favor of the proposal, representing approximately 80% of all outstanding shares.
"I want to thank our shareholders for their continued support of this transaction, which will not only deliver significant value to Lorillard shareholders, but will also benefit our customers, consumers and employees," said Murray Kessler, Lorillard's chairman, president and CEO.
Lorillard's board of directors approved a definitive agreement with Reynolds American in which Lorillard shareholders will receive, for each Lorillard share, $50.50 in cash and 0.2909 of a share in Reynolds American at closing.
Reynolds American also announced that at the company's special shareholders meeting on January 28, Reynolds American shareholders approved two proposals related to the company’s proposed acquisition of Lorillard, Inc.
They approved the issuance of the Reynolds American common stock to shareholders of Lorillard as consideration in the merger and the issuance of Reynolds American common stock to British American Tobacco PLC. BAT has a 42% stake in Reynolds American and it contributed capital to help finance the Lorillard acquisition.
Approval of both proposals was a condition to complete the merger. The transaction remains subject to regulatory approval and the additional customary closing conditions contained in the merger agreement. The companies said that they expect the transaction to close in the first half of 2015.
Lorillard, through its Lorillard Tobacco Co. subsidiary, is the third largest manufacturer of cigarettes in the United States. Founded in 1760, Lorillard Tobacco is the oldest continuously operating tobacco company in the nation. Newport, Lorillard Tobacco's flagship premium cigarette brand, is the top-selling menthol and second-largest-selling cigarette in the United States. In addition to Newport, the Lorillard Tobacco product line has four additional cigarette brand families marketed under the Kent, True, Maverick and Old Gold brand names. These five brands include 43 different products. Lorillard, through its other subsidiaries, is also a leading global electronic cigarette company, marketed under the blu eCigs brand in the United States and U.K.
Lorillard will maintain its corporate headquarters and manufactures all of its traditional cigarette products in Greensboro, N.C.
Reynolds American, Winston-Salem, N.C., is the parent company of R.J. Reynolds Tobacco Co., the second-largest U.S. tobacco company with brands including Camel, Pall Mall, Winston, Kool, Doral, Salem, Misty and Capri; American Snuff Co. LLC, the nation's second-largest manufacturer of smokeless tobacco products, with brands including Grizzly and Kodiak; Santa Fe Natural Tobacco Co. Inc., which manufactures and markets Natural American Spirit 100% additive-free natural tobacco products; Niconovum USA Inc.; Niconovum AB, which market nicotine replacement therapy products in the United States and Sweden, respectively, under the Zonnic brand; and R.J. Reynolds Vapor Co., which makes and markets Vuse e-cigarettes.
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