Imperial Tobacco Follows the Well Trodden Path to China

Making sense of the Global Market, Euromonitor International Ltd.

Yu Mitsuhashi

Making sense of the Global Market

Euromonitor International Ltd.

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Equity Bottom-Up

British American Tobacco / Equity Bottom-Up

<p>Despite recent whispers of an impasse in negotiations (revolving around the valuation of Reynolds’ next generation product portfolio), in a joint statement this morning Reynolds American and British American Tobacco confirmed that they had agreed the terms of a merger in which the UK-based company will acquire the remaining 57.8% of RAI it did not already own for some USD49.4bn. Reynolds shareholders will retain almost a fifth of the new entity, the world’s largest public tobacco company (by valuation, if not by volume). This deal heralds the final act in industry consolidation in combustible cigarettes, creates the first truly global next generation product operation and brings to a definitive close the US market’s litigation-induced isolation from the global landscape.</p>

Despite recent whispers of an impasse in negotiations (revolving around the valuation of Reynolds’ next generation product portfolio), in a joint statement this morning Reynolds American and British American Tobacco confirmed that they had agreed the terms of a merger in which the UK-based company will acquire the remaining 57.8% of RAI it did not already own for some USD49.4bn. Reynolds shareholders will retain almost a fifth of the new entity, the world’s largest public tobacco company (by valuation, if not by volume). This deal heralds the final act in industry consolidation in combustible cigarettes, creates the first truly global next generation product operation and brings to a definitive close the US market’s litigation-induced isolation from the global landscape.

Consequence of BAT's Full Acquisition of Reynolds Can Scarcely Be Overstated