NEW YORK -- The Federal Trade Commission is expected to approve Reynolds American’s $27 billion purchase of Lorillard by a vote of four to one, despite the objections of some agency staff, according to a New York Post report.
The deal will combine the second- and third-largest cigarette makers.
Regulatory approval will clear the way for a three-way transaction that will reshape the tobacco industry. Reynolds and Lorillard also agreed to sell five brands for $7 billion to Imperial.
While there was some skepticism the FTC would approve the deal, the companies argued that the sale of Winston, Kool and other smaller brands would build Imperial into a strong No. 3 player, the report said.
Imperial, which has little presence in the United States, also persuaded regulators that it can build its business here based on its success overseas.
While antitrust officials have looked askance at other mega-mergers in the cable and food industries, tobacco is an already tightly controlled industry that generates huge tax revenue, the report noted.
Even so, critics have called on regulators to block the deal.
Reynolds did not return calls. The FTC declined comment.
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