Lorillard Becomes a subsidiary of Reynolds American
Reynolds American (RAI) on Friday accomplished its purchase of Lorillard and, in doing so, ‘considerably increased, balanced and diversified’ its brand portfolio. Resulting from the purchase, Lorillard is currently a totally owned branch of RAI, and former Lorillard shareholders will own around 15 % of RAI’s common stock.
In a notice published on its website, RAI explained its operating companies currently had major brands across main industry categories like: Newport, Camel, Pall Mall and Natural American Spirit in combustible cigarettes; Grizzly in smokeless tobacco; and VUSE in the vapor market. ‘In the purchase, former Lorillard shareholders will get $50.50 in cash and 0.2909 of a share of RAI common stock for every share of Lorillard common stock they possessed,’ RAI stated. ‘In the associated divestiture dealings, subsidiaries of RAI have marketed the KOOL, Salem, Winston, Maverick and blu eCigs brands, and some other assets and liabilities, to ITG Brands, LLC, a subsidiary of Imperial Tobacco Group, PLC, for entire consideration of around $7.1 billion in cash.
'Moreover, British American Tobacco managed it is roughly 42 % ownership in RAI through an equity investment of about $4.7 billion.’
“Consequently after this purchase, Reynolds American has considerably increased, balanced and diversified portfolio of famous cigarette brands throughout all crucial categories - the most balanced in the industry,” stated Susan M. Cameron, RAI’s president and CEO.
“The transaction supports RAI’s initiatives to guide the modification of the tobacco industry. The synergies enhanced operational efficiencies and larger sales volumes produced by this combination will better place RAI’s operating companies to power continued investment in brand developing, R&D and advancement for the long-term future of the company.”
By Kevin Lawson, Staff Writer.
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